Billion Dollar Victory for MBIA in Financial Crisis Litigation

Kasowitz successfully represented MBIA, the largest monoline insurer, against 18 of the world’s largest banks seeking to undo MBIA’s $5 billion corporate restructuring.

Challenge

Faced with immense payouts from the collapse of housing markets, MBIA separated its municipal bond portfolio from its deteriorating structured finance business, with the approval of the NY Insurance Department. Eighteen banks and several hedge funds sued, arguing that the structured finance business was left insolvent.

Solution

Kasowitz marshaled massive amounts of fact and expert evidence demonstrating that MBIA’s structured finance business was properly capitalized after the restructuring, and showing that the banks’ self-serving claims were baseless.

Results

Kasowitz achieved a complete victory, obtaining an affirmance of the NYID’s approval of MBIA’s restructuring after a multi-week hearing, and favorably settling the other actions with MBIA receiving billions of dollars and its municipal bond business primed to emerge intact from the housing crisis.

For more information, contact: Marc E. Kasowitz, Albert Shemmy Mishaan or Kenneth R. David.