Banks Sue Over MBIA's 'Fraudulent' Corporate Split

Law360, New York (May 13, 2009, 12:00 AM EDT) -- A group of 18 financial institutions from around the world, including Bank of America NA, Citibank NA and JPMorgan Chase Bank NA, has alleged that MBIA Inc. defrauded policyholders when the bond insurer split its public finance and structured finance insurance businesses earlier this year.

The suit, filed Wednesday in the Supreme Court of the State of New York, County of New York, alleges that the split left one of the units effectively insolvent and unable to pay claims on insurance policies held by the banks....
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