Munger Tolles Represents Berkshire Hathaway in $5 Billion Investment

Munger, Tolles & Olson attorneys represented Berkshire Hathaway in its $5 billion investment in Bank of America announced August 25.

Berkshire will buy $5 billion of preferred stock that will pay a 6 percent annual dividend and can be redeemed at a 5 percent premium. Additionally the company will receive warrants for 700 million shares, exercisable at $7.14, which it can exercise during the next 10 years.

Reflecting on his decision to invest, Warren Buffet told Law360, “I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them.”

Many investors have been critical of Bank of America’s recent performance as its stock has fallen nearly 30 percent since the beginning of August 2011. However, news reports suggest that Buffett’s investment should bring confidence to Bank of America and investors.

Immediately after the deal was announced, Bank of America stock rose more than 25 percent. The Dow and investment companies such as Citigroup and Morgan Stanley also saw a rise.

Munger Tolles attorneys representing Berkshire Hathaway include Robert E. Denham, Mary Ann Todd, Mark H. Kim, Henry E. Orren, Renee Delphin-Rodriguez, Stephen D. Rose and Patrick G. Anderson.