Citigroup withdraws from MBIA restructuring case
NEW YORK (Reuters) - Citigroup Inc (C.N) on Monday withdrew from lawsuits challenging MBIA Inc's (MBI.N) 2009 restructuring, leaving 11 other companies to pursue claims against what was once the world's largest bond insurer.
The 11 companies, including several large banks, contend the restructuring overseen by the state insurance commissioner at the time, Eric Dinallo, left MBIA's structured finance unit undercapitalized, and unable to pay out on billions of dollars of claims.
That plan split MBIA's municipal bond business from its troubled structured finance operations, which suffered big losses from insuring mortgage-related debt.
The remaining plaintiffs are expected on May 31 to argue before New York's Court of Appeals, the state's highest court, that a divided appellate court in January erred by dismissing one of their two lawsuits challenging the restructuring.
A second lawsuit challenges the standard Dinallo used in approving the restructuring.
"Eleven global financial institutions remain committed to undoing MBIA's illegal restructuring," Robert Giuffra, a lawyer for the group, said in a statement.
Citigroup's case was dismissed with prejudice, meaning it cannot be brought again.
A Citigroup spokeswoman, Danielle Romero-Apsilos, declined to comment.
The remaining plaintiffs include Bank of America Corp (BAC.N), BNP Paribas SA (BNPP.PA), Credit Agricole (CAGR.PA), HSBC Holdings Plc (HSBA.L), KBC Investment Cayman Islands, Morgan Stanley (MS.N), Natixis SA (CNAT.PA), Royal Bank of Scotland Group PLC (RBS.L), Societe Generale (SOGN.PA), UBS AG (UBSN.VX) and Wells Fargo & Co (WFC.N), court records show.
Several other banks have in recent months also dropped their cases against MBIA, including Barclays Plc (BARC.L) and JPMorgan Chase & Co (JPM.N).
The cases are ABN Amro Bank NV et al v. MBIA Inc, New York State Supreme Court, New York County, No. 601475/2009, and ABN Amro Bank NV et al v. Dinallo et al in the same court, No. 601846/2009.
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