Thursday, April 30, 2009

our intention to pursue all available remedies against those parties whose improper actions have directly resulted in substantial losses for MBIA

TO BE NOTED: From Bloomberg:

"MBIA Sues Merrill Lynch Over Subprime-Debt Protection (Update1)

By Jody Shenn

April 30 (Bloomberg) -- MBIA Inc., the largest bond insurer, said that two of its units sued two Merrill Lynch & Co. businesses now owned by Bank of America Corp. over protection sold against mortgage-debt defaults.

The suit, filed in New York State Supreme Court, seeks to unwind $5.7 billion of credit-default swaps and related insurance sold against collateralized debt obligations, as well as recover damages, Armonk, New York-based MBIA said today in a statement.

Merrill Lynch misrepresented the nature of the debt being protected as part of a “deliberate strategy to offload” billions of dollars of “deteriorating” subprime mortgages, the insurer said in the statement.

“Today’s action is consistent with our intention to pursue all available remedies against those parties whose improper actions have directly resulted in substantial losses for MBIA and its shareholders,” MBIA Chief Executive Officer Jay Brown said in the statement.

William Halldin, a spokesman for Charlotte, North Caroline- based Bank of America, didn’t immediately return a phone call seeking comment.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net

Last Updated: April 30, 2009 16:49 EDT "

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