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Commitments And Contingencies | 6 Months Ended
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Jun. 30, 2011
Commitments And Contingencies |
Commitments And Contingencies | Note 13: Commitments and Contingencies The following commitments and contingencies provide an update of those discussed in "Note 24: Commitments and Contingencies" in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 as filed with the SEC on March 1, 2011 and should be read in conjunction with the complete descriptions provided in the aforementioned Form 10-K. Corporate Litigation In re MBIA Inc. Securities Litigation, No. 08-CV-264 (S.D.N.Y.) In July 2011, the parties reached a settlement agreement in principle pursuant to which the plaintiffs will receive $68 million in exchange for the dismissal with prejudice of the litigation. The Company's Director and Officer insurance carriers have agreed to cover in full the settlement payment. The agreement in principle remains subject to court approval. Trustees of the Police and Fire Retirement System of the City of Detroit v. Clapp et al., No. 08-CV-1515 (S.D.N.Y.) On June 3, 2011, Plaintiff filed an amended derivative complaint against certain of the Company's present and former officers and directors, and against the Company, as nominal defendant. Ambac Bond Insurance Coverage Cases, Coordinated Proceeding Case No. JCCP 4555 (Super. Ct. of Cal., County of San Francisco) Following a hearing on demurrers on July 6-7, 2011, the court sustained the Company's demurrer to four of the eight causes of action without leave to amend. The court also sustained the Company's demurrer to plaintiffs' cause of action for fraud, but with leave to amend. The surviving claims at present include plaintiffs' Cartwright Act, Unfair Competition law, and breach of contract based on Insurance Code Section 332 claims. In re Municipal Derivatives Antitrust Litigation, M.D.L. No. 1950 (S.D.N.Y.) As of May 31, 2011, the Company has answered all of the existing complaints. Tri-City Healthcare District v. Citibank. et al.; Case No. 30-2010-00359692 (Super. Ct. of Cal., County of Orange) On June 13, 2011, Tri-City Healthcare District filed its Fourth Amended Complaint against MBIA Inc., MBIA Corp. and National (collectively for this paragraph, "MBIA"), which purports to state seven causes of action against MBIA for fraud in the inducement, concealment, negligent misrepresentation, negligence, breach of contract, duress, and breach of the covenant of good faith arising from Tri-City Healthcare District's investment in auction rate securities. On July 15, 2011, MBIA filed its demurrer to the Fourth Amended Complaint. Recovery Litigation MBIA Insurance Corp. v. Countrywide Home Loans, Inc., et al.; Index No. 602825/08 (N.Y. Sup. Ct., N.Y. County) On June 30, 2011, the Appellate Division of the New York State Supreme Court affirmed the lower court's denial of Countrywide's motion to dismiss MBIA Corp.'s fraud claim. On May 25, 2011, MBIA Corp. filed its motion for partial summary judgment regarding proof of causation, and a hearing is scheduled for August 18, 2011. MBIA Insurance Corp. v. Bank of America, et al.; Case No. BC417572 (Super. Ct of Cal., County of Los Angeles) On July 14, 2011, the court lifted the discovery stay in order for the parties to negotiate depositions and coordinate same with the New York Countrywide action. MBIA Insurance Corp. v. Credit Suisse Securities (USA) LLC, et al.; Index No. 603751/09E On June 1, 2011, the court reversed its prior ruling issued on August 9, 2010, and dismissed MBIA Corp.'s fraudulent inducement cause of action. On June 24, 2011, MBIA Corp. filed a Notice of Appeal of the revised opinion. On July 7, 2011, the parties entered into a stipulation staying the case pending a hearing on MBIA Corp.'s motion to renew consideration of the court's June 1 revised opinion in light of intervening authority from the Appellate Division of the New York State Supreme Court—the June 30, 2011 opinion in MBIA Corp.'s New York Countrywide action discussed above. MBIA Corp. filed its motion to renew on July 22, 2011. MBIA Insurance Corp. v. Morgan Stanley; Index No. 29951-10 (N.Y. Sup. Ct., Westchester County) On May 26, 2011, the court denied Morgan Stanley's motion to dismiss, allowing MBIA Corp. to proceed on its fraud and breach of contract claims. On June 20, 2011, Morgan Stanley filed its answer to the complaint. On June 26, 2011, Morgan Stanley filed a Notice of Appeal with respect to the court's denial of its motion to dismiss. MBIA Insurance Corp. et al. v. Merrill Lynch, Pierce, Fenner, & Smith Inc. et al.; Index No. 601324/09E (N.Y. Sup. Ct., New York County) On July 12, 2011, the parties filed a joint stipulation voluntarily dismissing the case with prejudice. MBIA Insurance Corp. et al. v. Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A.; Case No. 09 Civ. 10093 (S.D.N.Y.) On April 16, 2010, Rabobank and Bank of New York Mellon filed respective pleadings opposing MBIA Corp.'s motion for summary judgment and in support of their own cross-motions for summary judgment. On March 25, 2011, the court denied summary judgment to defendants on plaintiffs' claim for breach of contract that it failed to provide proper notice of the sale of the reference obligations at issue, denied plaintiffs' motion for summary judgment and granted summary judgment to defendants on plaintiffs' remaining claims. Discovery will now commence on plaintiffs' surviving claim. Transformation Litigation Aurelius Capital Master, Ltd. et al. v. MBIA Inc. et al., 09-cv-2242 (S.D.N.Y.) The Aurelius plaintiffs have alerted the court of the June 28, 2011 Court of Appeals decision referenced below, and the court signed a new scheduling order. ABN AMRO Bank N.V. et al. v. MBIA Inc. et al.; Index No. 601475/09 (N.Y. Sup. Ct., N.Y. County) On June 28, 2011, the New York State Court of Appeals reversed the Appellate Division's decision and allowed all of the plaintiffs' claims to proceed, with the exception of plaintiffs' claim for unjust enrichment. Seven of the original nineteen plaintiffs have dismissed their claims, several of which dismissals were related to the commutation of certain of their MBIA-insured exposures. ABN AMRO Bank N.V. et al. v. Eric Dinallo et al.; Index no. 601846/09 (N.Y. Sup. Ct., N.Y. County) Submission of all papers relating to the original petition is scheduled to be completed by October 31, 2011. Barclays Bank PLC., et al. v. Wrynn et al.; Index No. 651811/2010 (N.Y. Sup. Ct., N.Y. County) The proceeding is currently stayed. The Company is defending against the aforementioned actions in which it is a defendant and expects ultimately to prevail on the merits. There is no assurance, however, that the Company will prevail in these actions. Adverse rulings in these actions could have a material adverse effect on the Company's ability to implement its strategy and on its business, results of operations, cash flows and financial condition. There are no other material lawsuits pending or, to the knowledge of the Company, threatened, to which the Company or any of its subsidiaries is a party.

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