Courtesy of Benzinga.
Shares of MBIA (NYSE: MBI) were trading up around 19 percent on Monday heading into the final hour of the session after a New York state judge dismissed a lawsuit brought against the company by a group of banks which challenged its 2009 restructuring. The lawsuit challenged the approval by New York regulators of MBIA’s split into a municipal bond insurer and a guarantor of structured finance products.
According to the banks lawsuit, the restructuring was fraudulent because it was done in such a way to leave MBIA unable to pay out claims it owed. The main remaining plaintiff in the case is Bank of America (NYSE: BAC), which said it plans to appeal the ruling.
Briefings in the case lasted nearly three years before oral arguments were heard last May and June. New York Supreme Court Judge Barbara Kapnick ruled on Monday that the state’s insurance regulator did not act in an “arbitrary and capricious” manner when it approved the restructuring, according to Reuters.
After Monday’s big rally, MBIA shares have now climbed better than 45 percent over the last 3 months. The stock is also up more than 60 percent in 2013.
