MBIA Inc. and BNP Paribas settled litigation challenging the bond insurer’s restructuring, according to the New York Department of Financial Services.
BNP, which was among banks that sued MBIA, is withdrawing from two lawsuits in New York State Supreme Court in Manhattan, according to court filings today. David Neustadt, a spokesman for the Department of Financial Services, said the companies reached a settlement.
MBIA, based in Armonk, New York, was sued by a group of financial institutions after the 2009 split of its main bond-insurance unit into two businesses. They claim the restructuring was intended to defraud policyholders and rendered MBIA Insurance Corp. insolvent.
The New York State Insurance Department, which approved the split, was sued with MBIA in a separate proceeding. The insurance department is now part of the Department of Financial Services.
Cesaltine Gregorio, a spokeswoman for Paris-based BNP, declined to comment on the agreement. Marc Kasowitz, an attorney for MBIA, didn’t respond to an e-mail seeking comment.
A group of plaintiffs have withdrawn from the cases, including Wells Fargo & Co., Credit Agricole SA, HSBC Bank USA., JPMorgan Chase & Co. Bank of America Corp., Societe Generale SA, UBS AG and Natixis remain plaintiffs in the cases, according to today’s court filings.
“We are pressing forward until the policyholders receive full satisfaction from the court, MBIA or the Department of Financial Services,” the bank policyholder group said in an emailed statement.
The cases are ABN Amro Bank NV v. MBIA Inc., 601475-2009, and ABN Amro Bank NV v. Dinallo, 601846-2009, New York State Supreme Court (Manhattan).