A major player in the ongoing Countrywide settlement dropped its suit against the defunct mortgage unit on Monday.

According to Reuters, Walnut Place, otherwise known as Baupost Group, withdrew objections to a proposed $8.5 billion settlement currently under way with Bank of America, which bought Countrywide in 2008.

The news service said that a tentative deal had been reached by institutional investors last year to settle allegations that the mortgage unit systematically misrepresented junk mortgage-backed securities in the lead-up to the financial crisis.

Walnut Place reportedly sought buyback claims from the lender for roughly $1 billion in soured mortgage bonds. According to Bloomberg News, the New York Supreme Court threw out the suit, a move that an appeals court upheld in March.

Speaking with MReport, a spokesperson with Bank of America declined to comment on the story.

Reuters quoted Dan Reilly, an attorney representative of American International Group Inc., as remarking that Walnut Place will stay with the case despite dropping claims.

“We’re still going forward,” he told the news service. “We’ve got a hearing next week and all the issues that have been raised are still in play.”

Barclays researchers responded to the withdrawal by saying they expect the Countrywide settlement will wrap up in early 2013.