NU Online News Service, July 5, 12:06 p.m. EDT
A decision by the New York State Court of Appeals allowing a group of banks to proceed with its lawsuit against MBIA's 2009 restructuring of its insurance operations has mixed credit implications for the MBIA family of companies, Moody's says.
In a decision last week, the court voted 5-2 to allow the banks to pursue their claim that the split of MBIA into two companies left the bank policyholders with an insolvent company that would be unable to pay claims. The court says there was no legal basis to "extinguish the historic rights of policyholders to attack fraudulent transactions."
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