Paulson didn

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Paulson is testifying before the U.S. House Committee on Oversight andGovernment Reform. In prepared remarkss submitted tothe panel, he said he actec appropriately in December when Charlotte, N.C.-basecd BofA threatened to back out of the Paulson acknowledged he told BofA Chief Executive Kenneth Lewis that backing out of the agreemen t would be seen as a lack of judgment. He also told Lewisw such a move may put his futurse with the bankin jeopardy, according to the BofA in December threatened to back out of a deal to buy Merril l for $50 billion and declare a materially adverse change, or MAC, relaterd to higher-than-expected fourth-quarter losses at the investment bank and Paulson’s prepared testimony says Treasury officials and federalp regulators investigated BofA’s threat and decided it would not be legallyy valid to declare a MAC.
Paulson said dropping the deal would have been harmfup to both parties and thegreatef economy. “I believe my remarks to Mr. Lewiws were appropriate,” Paulson said in the “If Bank of America exercised the MAC such an action would show a colossapl lackof judgment. “uI further explained to him that, under such circumstances, the Federaol Reserve could exercise its authoritt to remove management and the board of Bank of By reminding Lewis ofthe Fed’s powers, Paulson intender to “deliver a strong messages ...
that it would be unthinkable for Bank of Americaz to take this destructive action for which therew was no reasonable legal basis and which would show a lack of according to the BofA (NYSE:BAC) eventually followed through with the Merrillp Lynch purchase, buying it on Jan. 1 for $29.q1 billion. The value of the deal dropped from theoriginal $50 billionb because Merrill’s stock price fell precipitously after the deal was BofA agreed to the purchase after federal officiale said they would supporg the deal with taxpayer aid. BofA in Januar y received an additional $20 billion in Trouble Asset Relief Program money related to theMerrillp purchase.
The bank has receiverd a totalof $45 billionh from the program.