NEW YORK (Associated Press) - A Delaware judge on Thursday granted preliminary approval of a proposed settlement in a shareholder lawsuit against mortgage lender Countrywide Financial Corp.

Attorneys representing Countrywide shareholders in a federal lawsuit in California asked Vice Chancellor John Noble to reject the settlement, but Noble said he saw no reason to rule now on preliminary objections by one group of shareholders, when all shareholders will be given the opportunity to weigh in later.

"In essence, I'm being asked to reject or derail the settlement before it can be fully considered," the judge said in a telephone conference with attorneys.

A formal hearing on the settlement was tentatively scheduled for late October.

Lawyers representing public employee pension funds in four states argued that the Delaware settlement could affect their own claims in California against officers and directors of Countrywide, whose troubles led to a buyout by Bank of America Corp. that was completed this week.

They also said the settlement was inadequate because it does not include any monetary relief for the plaintiffs, who alleged that Countrywide directors breached their fiduciary duties by discouraging other bids and accepting an inadequate offer from Bank of America. Instead, the settlement agreement calls only for additional disclosures by the defendants regarding the Bank of America deal _ disclosures which already have been made in filings with the Securities and Exchange Commission.

Stuart Grant, an attorney in the California who objected to the settlement, suggested that Noble was being used by the defendants in "one of the greatest exculpation schemes ever devised."

Grant argued that shareholders were entitled to monetary relief, and that it would be "an extraordinary injustice" if the defendants, including Countrywide Chief Executive Angelo R. Mozilo, were allowed to walk away "after almost single-handedly causing the subprime crisis."

Jeffrey Golan, an attorney for the plaintiffs in the Delaware case, said the settlement was negotiated after examining more than 400,000 pages of documents and deposing several witnesses, and that it was the best outcome for shareholders given Countrywide's deteriorating financial condition.

David McBride, an attorney for Bank of America, said Countrywide shareholders received adequate consideration in the merger.

Bank of America gave Countrywide shareholders 0.1822 share of Bank of America for each share of Countrywide they owned. The deal was worth around $2.5 billion, based on Bank of America's stock price Tuesday when the deal closed.

"I think from any economic point of view, there was compelling consideration, and there was overwhelming approval from stockholders," McBride said.

Attorneys supporting the settlement said it would cover other merger-related claims by shareholders, but that it would not affect federal securities claims against Mozilo or others, or the case in California, which is a derivative action filed by shareholders on behalf of the company itself.

Grant said the company stood to recover up to $2 billion from Countrywide officers and directors if the California plaintiffs are successful, and that the Delaware settlement could be an obstacle in his effort to amend the California complaint to add merger-related damage claims.

While attorneys for Countrywide disputed the $2 billion figure, the point was not lost on Noble.

"Disclosure versus $2 billion doesn't weigh very equally in the scales of justice," said the judge, adding that Grant should be allowed to obtain information from attorneys for Countrywide and the plaintiffs to determine whether the settlement can be considered reasonable.