MBIA's $5B Restructuring Used Illegal Process, Banks Say

Law360, New York (May 18, 2012, 6:33 PM EDT) -- New York state insurance regulators approved MBIA Inc.'s $5 billion restructuring even though several steps in the bond insurer's "transformation" aren't permitted under the state's insurance laws, banks challenging the deal told a New York state judge Friday.

Bank of America Corp. and Societe Generale SA, who are spearheading the Article 78 challenge to the state's approval of the 2009 restructuring, allege that MBIA submitted false information to the state Insurance Department and that the regulators rushed the approval through with little regard for legal requirements....
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