Parties To Consolidated MBIA Subprime Securities Action Agree To Settle For $68 Million

Parties To Consolidated MBIA Subprime Securities Action Agree To Settle For $68 Million

According to papers filed on September 6, 2008, the parties to the consolidated MBIA securities action pending in the Southern District of New York have agreed to settle the lawsuit for $68 million. The settlement is subject to court approval. As noted below, the settlement has some interesting features.

The parties' stipulation of settlement can be found here and the plaintiffs' motion for preliminary approval of the settlement can be found here. Nate Raymond's September 7, 2011 Am Law Litigation Daily article describing the settlement can be found here.  

As discussed here, in January 2008, MBIA joined a group of several other bond insurers there were sued in securities class action relating to their alleged failures to disclosure the exposures they had as a result of insurance guarantees they had extended ion mortgage related securities. The lawsuit against MBIA followed the company's disclosure of the extent of the guarantees the company had extended on collateralized debt obligations. Among other things, the disclosure revealed the extent to which the company had issued insurance on so-called CDOs-squared.

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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.

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