The long-awaited courtroom battle in a lawsuit challenging state regulators’ approval of bond insurer MBIA’s restructuring in 2009 got underway in earnest yesterday, with Sullivan & Cromwell partner Robert Giuffra Jr. beginning his case on behalf of the banksBank of America Corp. and Societe General SAthat are challenging the restructuring. Giuffra opened his argument by stressing that the outcome of the case has implications far beyond MBIA. “This case matters to every policyholder of a New York regulated insurance company,” he told Manhattan Supreme Court Justice Barbara Kapnick (See Profile).
In 2009, during the financial crisis MBIA split itself into two companies: a “bad insurer” that took on its policies on risky financial products and a “good insurer” that took on its traditional municipal bond insurance policies. The banks, which are seeking to reverse the approval of that restructuring through an Article 78 proceeding, allege the transaction was structured to transfer $5 billion in assets from the bad insurer to the good, leaving the bad insurer’s policyholders, like the banks, with no hope of getting paid.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
