NEW YORK (Reuters) – Bank of America Corp and Societe Generale on Tuesday will begin opening arguments in a New York State courtroom to overturn the 2009 restructuring of bond insurer MBIA Inc.
The banks are the only two plaintiffs remaining of 18 that sued MBIA and then-New York state Insurance Commissioner Eric Dinallo in 2009. They will try to convince a judge that the state insurance department abused its discretion when it approved MBIA's restructuring.
The reorganization segregated MBIA's troubled structured-finance business from its traditional bond business. The banks claim $5 billion was siphoned from the structured-finance unit, at the expense of entities that had insured securities with MBIA.
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