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BNP Paribas latest bank to withdraw from MBIA case


NEW YORK (Reuters)—BNP Paribas S.A. withdrew from lawsuits challenging MBIA Inc.'s restructuring, becoming the latest bank to give up legal claims against the bond insurer.

The French bank agreed to settle with Armonk, N.Y.-based MBIA, according to a spokesman for the New York state Department of Financial Services.

Bank of America Corp., Natixis S.A., Société Générale and UBS A.G. are still challenging the February 2009 restructuring.

The restructuring split MBIA's municipal bond business from its structured finance operations, which suffered big losses from insuring mortgage debt.

A spokesman for the four remaining banks said: "We are pressing forward until the policyholders receive full satisfaction from the court, MBIA or the Department of Financial Services."

Banks filed parallel lawsuits in 2009 against MBIA, once the world's largest bond insurer, claiming the restructuring was intended to defraud policyholders. The banks claim the split left MBIA undercapitalized and possibly unable to pay their claims.

The banks also sued New York's then-superintendent of insurance, Eric Dinallo, who had approved MBIA's 2009 split.

Other banks who had been party to the lawsuits and settled include Morgan Stanley, Royal Bank of Scotland and Wells Fargo & Co.

Cesaltine Gregorio, a spokeswoman for BNP Paribas, declined comment on Tuesday, as did MBIA spokesman Kevin Brown.

The cases are ABN Amro Bank N.V. et al. vs. Eric Dinallo, 601846/2009, and ABN Amro Bank N.V. et al. vs. MBIA Inc., 601475/2009, both in New York state Supreme Court.

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