Banks Suing N.Y. Over MBIA Restructuring Won’t Seek Jury
Banks suing a New York state regulator over the decision to approve the 2009 restructuring of bond insurer MBIA Inc.’s (MBI) insurance business won’t seek a jury trial in the case, according to court documents.
MBIA, based in Armonk, New York, was sued by financial institutions after the 2009 split of its main bond-insurance unit into two businesses. The banks claim the restructuring was intended to defraud policyholders and rendered MBIA Insurance Corp. insolvent. Former state Insurance Superintendent Eric Dinallo was sued separately under a law that allows court review of administrative decisions.
The banks won’t demand a jury in the case against the regulator and agreed to have it tried by Justice Barbara R. Kapnick of state Supreme Court, Robert Giuffra, a lawyer for the petitioners, said yesterday in a letter to the judge. A trial is to begin between May 2 and 14, according to Giuffra’s letter.
UBS AG will withdraw from the MBIA litigation, a person familiar with the matter said March 15. Switzerland’s biggest lender is one of four remaining banks in the lawsuit that bought default protection from MBIA against losses on mortgage-linked debt.
Fourteen other firms dropped out of the suits, including Morgan Stanley and Barclays Plc, after settlements that terminated their hedges with MBIA.
The cases are ABN AMRO BANK NV l v. Dinallo, 601846-2009, and ABN AMRO BANK NV v. MBIA, 601475-2009, and, New York State Supreme Court (Manhattan).
To contact the editor responsible for this story: Michael Hytha at email@example.com