Bank of America, Citigroup, JPMorgan and 15 other financial institutions filed suit on Wednesday against MBIA, claiming the bond insurer reduced its ability to pay policyholders by splitting its business in two. The suit, which also includes Barclays, HSBC and other European banks, is the second legal challenge to MBIA’s restructuring since since it gained regulatory approval in February to split into a “good bank” guaranteeing municipal bonds and a “bad bank” insuring mortgage-backed structured bonds.
