Now in Legal Rebels:
Posted Nov 18, 2009 12:38 pm CST
Bank of America officials told a skeptical congressional panel yesterday that the abrupt firing of the company’s general counsel late last year was just part of a general corporate downsizing.
For his part, former general counsel Timothy Mayopoulos says he was given no reason for his dismissal last Dec. 10, and he still doesn’t know why it happened. Some panel members, however, suggested the dismissal could have been triggered because officials didn’t like Mayopoulos’ legal advice on whether the bank had a legal reason to escape from a planned merger with Merrill Lynch, Corporate Counsel reports.
Mayopoulos’ supervisor, Brian Moynihan, told the House Oversight and Government Reform Committee that he doesn’t know why Mayopoulos was fired. Moynihan said he assumed it was part of a 10 percent cut in executive staff, but he never asked for a reason, according to the Corporate Counsel report.
Moynihan was named to replace Mayopoulos, and he served in the job for 44 days. Before he got the GC job, Moynihan said, he had planned to leave Bank of America because he was not pleased with the position he would get after the merger.
Mayopoulos’ opinion that Bank of America could not back out of the merger contradicted the bank’s later assertion that there was reason to invoke a contractual escape clause. The bank’s assertion led to an additional $20 billion in bailout funds.
On the day he was fired, Mayopoulos was told he had to leave immediately. A human resources representative asked him for his corporate ID, company credit card, office keys and BlackBerry.
Mayopoulos now has a new job as general counsel of Fannie Mae. Moynihan is now the head of retail banking and is a candidate to replace Bank of America chairman Ken Lewis.