Just four days after Bank of America’s shareholders had approved the acquisition of Merrill Lynch, long time Merrill lawyer Pete Kelly found himself sitting inside the office of Timothy J. Mayopoulos, the general counsel of Bank of America.
It wasn’t a friendly meeting. There were lots of redundancies between the two banks, especially in the legal departments. Bank of America was intent on making cuts into the Merrill Lynch legal staff. Revelations of losses at Merrill had only emboldened Bank of America executives when it came to cutting out what some viewed as the “fat” at Merrill.
Kelly, according to people familiar with the matter, was set on resisting the cuts. He regarded his staff as top notch, and found the Bank of America staff wanting in experience and speed of execution. These fears would later prove justified, as simple trading documents would sometimes take days for Bank of America’s staff to approve, sometimes ruining the trade altogether. These were things Merrill attorneys had handled quickly and regularly.
But down there in Charlotte on that December day, Kelly found himself in a heated argument with Mayopolous. Voices were raised. Both men were confident, long-time employees used to being respected by both superiors and underlings alike. But at one point, Kelly wondered if he too might lose his job if Bank of America attempted to remake Merrill, according to a person familiar with the matter. He may have wondered if the job was even worth keeping, the person speculated.
Then something surprising happened. A polite young woman dropped by Mayopolous’s office and asked him to come to another meeting. Mayopoulos left Kelly in his office, promising to return after a few moments.
The minutes clicked by. After a half hour or so, a secretary opened the door to Mayopoulos’s office. Kelly, who was still sitting there, and who had been arguing with Mayopoulos over which of Kelly’s staff would be fired, was told that Mayopoulos himself had left the firm and been escorted from the building.
Kelly then left the Charlotte, North Carolina headquarters to fly back to New York. It’s easy to imagine him shaking his head, thinking that this merger was going to be far, far more difficult than anyone was anticipating. Those Bank of America guys were a mess.
This morning’s New York Times reveals what happened when Mayopoulos left the office. Mayopoulos had been summoned to the executive suite of Bank of America, where the chief risk officer told him that he was no longer needed at the company. He received no explanation for the obviously unexpected dismissal.
The Times also reported a far vaguer version of this meeting, saying the departure of Mr. Mayopoulos, “surprised executives at Merrill Lynch who had been meeting with him for weeks to figure out how the combined legal department would be arranged. He was involved in such a meeting when he was called in and dismissed, two people briefed on those discussions said.”
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