Bond insurer MBIA Inc has agreed to pay Societe Generale US$350 million to settle litigation over the former’s restructuring, reported Reuters.
MBIA has reportedly confirmed the settlement in a regulatory filing, according to which the agreement puts an end to all litigation brought against the bond insurer by 18 financial institutions.
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Societe General was, reportedly, the last remaining bank out of those financial institutions, that challenged MBIA’s 2009 split between its structured finance unit and its municipal bond business. According to the banks, the move harmed them as policyholders.
In March 2013, MBIA won dismissal of one case by Bank of America (BofA) and Societe Generale after a New York judge ruled that the state insurance superintendent at the time, was not "arbitrary and capricious" in authorising the split.
On 6 May, BofA agreed to pay US$1.6 billion in cash to MBIA and receive the right to buy a 4.9% stake in the latter, to resolve long-running litigation between the two companies.
The settlement highlighted BofA chief executive, Brian Moynihan’s, latest step to settle lawsuits related to the financial crisis.
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