One theme in the many shareholder criticisms of how Bank of America handled the Merrill Lynch purchase was that then-CEO Ken Lewis had fielded a lucrative bailout package from then Treasury Secretary Henry Paulson to prod the bank to close its deal for Merrill Lynch.

That bailout proposal should have been disclosed to shareholders, many argue. A federal judge however has nixed that portion of a shareholder suit, even as he allowed the overall suit to proceed. The judge ruled that the pension plaintiffs failed to show that Lewis acted recklessly or with intent to deceive when they decided not to disclose the offer, reports Fortune.

This strikes a blow to those who believe that Lewis was under pressure from regulators to get a deal done and that was enough to affect the bank's judgment when it comes to shareholder disclosure issues.

A lot of people would like this issue fleshed out a bit more. But it will not happen as part of this suit. It will likely figure in the case the State of New York is pressing against Bank of America.

For more:
- here's the article

Related Articles:
Ken Lewis wanted out of the deal
John Paulson going retail
Ex-Bank of America CEO Ken Lewis to stand trial?
Scorecard: Congress and Paulson & Co.