Bank of America (NYSE:BAC) Attorneys Pay Legal Fees for Cabi Downtown Lawyers After Judge Criticizes Them

Although they weren’t required to do it, attorneys for Bank of America (NYSE:BAC) decided to voluntarily pay the legal fees of their opposing lawyers in the Cabi Downtown case, where the judge state they were attempting to only “score a litigation point” in the foreclosure case to decide the future of the property.

Judge Laurel Myerson Isicoff confronted the Bank of America lawyer team on using the information of nine convicted felons being in the complex to influence the proceedings. Evidence seems to indicate the lawyers didn’t check thoroughly into the situation and the situation wasn’t near as bad as it seemed to indicate; which triggered the anger of Judge Isicoff in the matter.

A hearing had been set by Judge Isicoff to determine whether the lawyers at Kaye Scholer should pay a portion of the legal fees of Cabi because of the allegations that largely proved not to be true. Rather than go through the proces, and possibly bring more negative press on the firm, they decided to pay Cabi for the their fees.

The actual charges that there were nine felons allowed to live in the building turned out to be completely erroneous. One of the nine was alleged to be a sexual offender by Bank of America attorneys, which was not true at all. Of the nine people talked about, two did have criminal records, but they weren’t considered to be of any concern by Cabi.

Bank of America had asked the bankruptcy proceeding to be dismissed last month, claiming Cabi only entered into it for the purpose of stopping the foreclosure process they had initiated on them. The judge ruled against the proposal, and has allowed the bankruptcy to continue. They also filed an emergency motion to keep Cabi from continuing to lease units at the 850-unit Everglades (in Miami), saying the property has been allowed to deteriorate, and the company isn’t fixing damage when it occurs.

Lawyers for BofA have also stated the contractors haven’t been paid recently and the rental units are being leased without adhering to guidelines in the deal.

Of the 850 units in the complex, 109 have sold, while another 260 units are now rented in what Cabi is calling a “deferred purchase program.” That seems to mean they’re just getting bodies into the building to give the appearance that it’s filling up.

With a $256 million construction loan on the property, Bank of America is obviously concerned over the condition they receive the building back in if the foreclosure is eventually implemented against Cabi.

Cabi blames it problems partially on Bank of America, accusing them of no lowering the minimum price of the condos in order to increase sales; an accusation Bank of America largely denies.