RBS Latest To Exit $5B MBIA Restructuring Suit

Law360, Washington (November 14, 2011, 6:29 PM EST) -- The Royal Bank of Scotland PLC on Friday became the most recent of several banks to withdraw as plaintiffs from an action alleging MBIA Inc. fraudulently pulled $5.4 billion out of its insurance unit during its 2009 restructuring.

The banks allege the restructuring was fraudulent because it stripped $5.4 billion in cash and securities out of MBIA's profitable public finance insurance business and transferred it to an Illinois subsidiary. In January, a New York appeals court threw out the suit, holding that the banks couldn’t pursue...
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