Monoline insurers have filed more than 32 suits against banks over mortgage-backed securities gone bad. The cases below are among the most closely watched, either because of the damages at stake or because of how far the litigation has advanced.
Suit | Damages sought | Monoline counsel | Bank counsel | Claims | Status |
MBIA v. Countrywide (Bank of America) | $3 billion | Quinn Emanuel | Goodwin Procter (Countrywide); O’Melveny & Myers (BofA) | Fraud, breach of contract | A New York state appellate court greenlit MBIA’s fraud claims in June 2011. Justice Eileen Bransten in January held that MBIA only had to show it wouldn’t have insured the securitizations had it known of Countrywide’s alleged fraud. |
MBIA v. Residential Funding (Ally) | $871 million | Cadwalader | Carpenter Lipps & Leland | Fraud, breach of contract | Discovery is proceeding after a New York state court judge denied a motion to dismiss in December 2009. |
Ambac v. EMC Mortgage (J.P. Morgan Securities) | $641 million | Patterson Belknap | Greenberg Traurig (EMC); Sullivan & Cromwell (J.P. Morgan Securities) | Fraud, breach of contract | Discovery is proceeding in New York state court after federal district court judge Richard Berman dismissed a federal version of the suit on diversity grounds. |
FGIC v. Ally Financial | $549 million* | Jones Day | Orrick | Fraud, breach of contract | Ally has removed the suits to federal district court in Manhattan. |
MBIA v. Credit Suisse | $296 million | Patterson Belknap | Orrick | Fraud, breach of contract | In October New York state court judge Shirley Kornreich reversed her own decision dismissing MBIA’s fraud claims. Credit Suisse has appealed. |
Syncora v. J.P. Morgan Securities | $168.6 million | Patterson Belknap | Greenberg Traurig; Sullivan & Cromwell | Fraud, breach of contract | Filed in New York state court, the suit is moving parallel to a federal suit brought by Syncora against EMC. |
Assured Guaranty v. Flagstar Bancorp | $82.4 million | Susman Godfrey | Arnold & Porter | Breach of contract | At press time, trial was set to begin before federal district court judge Jed Rakoff in Manhattan as early as February 15. |
*Total damages sought in eight separate lawsuits filed by FGIC against units of Ally.