Investor Targets MBIA Over $5B Restructuring Transfer

Law360, New York (September 11, 2012, 11:02 PM EDT) -- Mortgage-backed securities investor CQS ABS Master Fund Ltd. hit MBIA Inc. with a lawsuit Monday challenging its transfer of $5 billion from its struggling insurance unit as part of a 2009 restructuring, saying MBIA Insurance Corp. policyholders were hung out to dry.

CQS' allegations, filed in New York federal court, are similar to those brought by hedge fund Aurelius Capital Management Ltd., which settled with the bond insurer in April. CQS accuses MBIA of ditching its insurance arm in an attempt to protect itself against the...
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