- Legal Industry
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In early June, a little-known Texas attorney named Kathy Patrick was suddenly thrust into the limelight as the nation came to know the person behind the successful $8.5 billion settlement with Bank of America and her clients, which included BlackRock and Pimco.
That legal settlement is, by far, the second-biggest in American history, the first being the 1998 tobacco master settlement. Subsequently, Bank of America reported a staggering $8.8 billion quarterly loss, which signaled the start of a difficult and long summer in Charlotte.
Instead of celebrating the career-capping victory, Patrick viewed it as round one. And this is what is scaring Wall Street right now.
Under the public’s stern gaze, the financial industry and the U.S. government are dancing around a likely $20 billion settlement being forced on the biggest banks in the nation by state attorneys general over inappropriate foreclosure practices.
But quietly and without much fanfare, Patrick, along with her 23 bondholding giants, regarded by some as one of the most commanding investor groups ever assembled for litigation, are preparing for something equally big. And this is a painful new reckoning for the mortgage-lending fiasco, with most of the big banks of Wall Street in her crosshairs.
In a media interview, Patrick said, “This group did not come together just to deal with Bank of America. They came together because they wanted a comprehensive industry-wide strategy and an industry-wide solution. They started with Bank of America because they thought they could achieve a template that they could extend to other institutions.”