Lawyers for banks seeking to overturn New York state regulators' approval of bond insurer MBIA Inc.'s restructuring in 2009 completed their opening arguments after three days, Bloomberg News reported on Friday. New York State Supreme Court Justice Barbara Kapnick is overseeing a nonjury trial on Bank of America Corp. and Societe Generale SA's claims that the February 2009 approval of MBIA's proposal by then-Insurance Superintendent Eric Dinallo was based on inaccurate and incomplete information and therefore violated state insurance laws and should be overturned. More than a dozen financial institutions sued Armonk, N.Y.-based MBIA and the state insurance department in 2009 over the restructuring. Bank of America and Societe Generale are the only banks left in the litigation after JPMorgan Chase & Co., Morgan Stanley, UBS AG and others dropped out. The banks claim the restructuring harmed them as policyholders by transferring $5 billion in assets out of the MBIA unit that insured risky mortgage debt, exposing the banks to potential losses. Bank of America and Societe Generale have another lawsuit pending against MBIA while MBIA is suing Bank of America over mortgage loans.
