Mutual Funds Sue MBIA Over Public Bond Unit Split

Law360, New York (April 7, 2009, 12:00 AM EDT) -- Investment firm Third Avenue Management LLC has sued two subsidiaries of MBIA Inc. for allegedly defrauding holders of the bond insurer's debt in a recent corporate restructuring that split MBIA's public finance insurance business from its structured finance insurance business.

In a complaint filed Monday in the Court of the Chancery for the State of Delaware, two mutual funds managed by Third Avenue sued MBIA subsidiary MBIA Insurance Corp. for claims of fraudulent transfer and breach of contract arising out of the transfer in February of...
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