As they promised immediately after their high-profile loss to MBIA Inc. earlier this month, Bank of America and Société Genéralé are taking their fight with the bond insurer back up to a New York state appellate court. Robert Giuffra Jr. of Sullivan & Cromwell filed the banks’ notice of appeal on March 18 along with a 34-page brief asserting that Manhattan Supreme Court Justice Barbara Kapnick’s decision is fatally flawed.
Kapnick (See Profile) refused to overturn the state’s approval of MBIA’s $5 billion restructuring, ruling for MBIA and the New York Insurance Department, which has been merged into the new Department of Financial Services (NYLJ, March 5). In the banks’ pre-argument statement to the Appellate Division, Giuffra challenges Kapnick for deferring to "erroneous interpretations" of Insurance Law. He also argues that Kapnick adopted an unprecedented view of the scope of judicial review under Article 78, ruling that even evidence that MBIA gave regulators false information wouldn’t sway her decision.
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