goldfinger Posted April 20, 2012 Share Posted April 20, 2012 Looks like we have a trial on our hands 4 weeks starting May 14 if what I can read from Frankel and others is accurate. Link to comment Share on other sites More sharing options...
goldfinger Posted April 20, 2012 Share Posted April 20, 2012 I caught this thread on Twitter by Robert Slavin who was at the article 78 hearing today: C. Herzeca questions: "@RobertSlavin_BB i heard it reported that she (Knapnick, the judge) wanted to focus on the ins comm's decision, not $mbi's actions. anything else you heard? thx" Answer: "I was at the MBIA transfromation hearing today & I think the judge's statements may be making its attorneys happy this afternoon." "Despite all the talk about the MBIA trial being decided to be 4 weeks today, the judge actually said she hoped for one or two weeks." I heard Knapick had always been in favor of a quick settlement. So we may not have long to wait anymore... Link to comment Share on other sites More sharing options...
alertmeipp Posted April 21, 2012 Share Posted April 21, 2012 stupid to drag this one for both. settlement means less exposure to both. Link to comment Share on other sites More sharing options...
rranjan Posted April 21, 2012 Share Posted April 21, 2012 stupid to drag this one for both. settlement means less exposure to both. I think they will settle it before the trial. Link to comment Share on other sites More sharing options...
valuecfa Posted April 24, 2012 Author Share Posted April 24, 2012 The pretrial transcript: http://newsandinsight.thomsonreuters.com/uploadedFiles/Reuters_Content/2012/04_-_April/042012Asteno.pdf In my opinion, it went in MBIA's favor... in terms of the narrow scope the trial will likely take. Link to comment Share on other sites More sharing options...
Cardboard Posted April 24, 2012 Share Posted April 24, 2012 I read it this afternoon and it sure sounds like the judge is somewhat siding up with MBIA and the insurance regulators. Hopefully, it will make the 3 remaining banks think long and hard about continuing down this road. What happens to Societe Generale and Natixis if BAC decides to settle in coming days? Are both French banks going to continue down the path of a trial? What is in it for them? Cardboard Link to comment Share on other sites More sharing options...
goldfinger Posted April 25, 2012 Share Posted April 25, 2012 nice review of MBIA's legal procedures: http://www.subprimeshakeout.com/2012/04/mbia-on-winning-streak.html Link to comment Share on other sites More sharing options...
prunes Posted April 26, 2012 Share Posted April 26, 2012 Can someone shoot down my optimism? I have a significant % (for me) in this. It seems like a no brainer. I would think that MBIA could easily negotiate with BAC, et al, to drop the putback litigation if they dropped the Article 78 / fraudulent conveyance litigation. And if that happened you'd be looking at a double. You'd have walled off the structured finance liabilities, and you have the upside if National starts writing again. Right now you have this existential risk hanging over MBIA's head if they lose the fraudulent conveyance and putback litigation. Obviously granted MBIA thinks it can win but by holding out it perpetuals this tail risk and delays the ability of investors to realize value. Seems silly to me. MBIA has no chance IMO of winning a successor liability case, but this presents its own existential risk to BAC (albeit very small odds). Plus BAC has the nuclear option of throwing Countrywide into bankruptcy. Just get the settlement over with! Link to comment Share on other sites More sharing options...
JRH Posted April 26, 2012 Share Posted April 26, 2012 MBIA bonds are 40% of Fairholme Focused Income fund, common is 28% of Fairholme Allocation (both as of 2/29/12). http://www.sec.gov/Archives/edgar/data/1096344/000119312512181093/d337075dnq.htm "Rule number one, don't lose money!" Just amazes me that he has so much confidence in a company that everyone else thinks is so risky. Link to comment Share on other sites More sharing options...
jegenolf Posted April 26, 2012 Share Posted April 26, 2012 MBIA has no chance IMO of winning a successor liability case, but this presents its own existential risk to BAC (albeit very small odds). Plus BAC has the nuclear option of throwing Countrywide into bankruptcy. Just get the settlement over with! What are you basing this opinion on? The link posted by Goldfinger above actually links to a reasonably strong reason to believe MBIA WILL win the successor liability case if it ever came to that. Granted, it's a year old, but read this as well as the comments: http://www.subprimeshakeout.com/2010/06/bofa-and-countrywide-appeal-order-allowing-mbia-vicarious-liability-claim-to-proceed.html Sorry if that doesn't dampen your enthusiasm though. Link to comment Share on other sites More sharing options...
prunes Posted April 26, 2012 Share Posted April 26, 2012 I'm going off the legal opinion of the Stanford professor that opined on the issue. MBIA still would need to win the fight for a case to be decided under NY law, and then to win the trial itself. Seems like an uphill, lengthy battle to me. Link to comment Share on other sites More sharing options...
jegenolf Posted April 26, 2012 Share Posted April 26, 2012 I'm going off the legal opinion of the Stanford professor that opined on the issue. MBIA still would need to win the fight for a case to be decided under NY law, and then to win the trial itself. Seems like an uphill, lengthy battle to me. So this: http://www.cwrmbssettlement.com/docs/Opinion%20Regarding%20Corporate%20Separateness.pdf Yeah, I wrote that off as a paid-for opinion because there was serious pressure to push the settlement through, but I just read it again and I don't really agree with myself. I still think it's an opinion with a clear bias, but that doesn't mean it's wrong. Link to comment Share on other sites More sharing options...
goldfinger Posted April 30, 2012 Share Posted April 30, 2012 Interesting reasoning from Frankel: winning article 78 might not be in BAC favor and Lawsky may still turn the outcome back towards a settlement if BAC wins (low probability): http://newsandinsight.thomsonreuters.com/Legal/News/ViewNews.aspx?id=46266&terms=@ReutersTopicCodes+CONTAINS+%27ANV%27 Link to comment Share on other sites More sharing options...
goldfinger Posted April 30, 2012 Share Posted April 30, 2012 On the other side I caught a thread from C. Herzeca that speaks about the fact that Bransten (reps and warranties law suit) again ruled in disfavor of BAC by denying motion to compel production of ins of mortgages for MBIA. It all comes down to whether or not MBIA's employees properly followed MBIA's insurance guidelines or not. Link to comment Share on other sites More sharing options...
valuecfa Posted May 8, 2012 Author Share Posted May 8, 2012 Natixis is out. Link to comment Share on other sites More sharing options...
Cardboard Posted May 8, 2012 Share Posted May 8, 2012 Yes, now only 2 out of 18 plaintifs remaining: Societe Generale and Bank of America. Makes you wonder what they are thinking especially at BAC. Settling would seem so much better. Makes me wonder sometimes if Brian Moynihan is such a great leader after all. His ego was bruised during the proceedings against MBIA and the judge decision for him to testify personally and I am afraid it may have hurt his judgement. As a consequence, we remain seen as a bad bank in part because of all these lawsuits insted of moving towards the JPM and WFC of the world. I would prefer that company vs ResCap and the European banks. Cardboard Link to comment Share on other sites More sharing options...
valuecfa Posted May 9, 2012 Author Share Posted May 9, 2012 It will be interesting to see Moynihan risks his testimony on successor liability to maintain leverage on the reps & warranty case through the continuation of the transformation trial. This game of chicken is getting close to collision. Link to comment Share on other sites More sharing options...
Grenville Posted May 9, 2012 Share Posted May 9, 2012 It will be interesting to see Moynihan risks his testimony on successor liability to maintain leverage on the reps & warranty case through the continuation of the transformation trial. This game of chicken is getting close to collision. It looks like he's already been deposed. See below: From Alison Frankel's Twitter feed: christian herzeca @cherzeca @AlisonFrankel @darren151151 from palmer's research at BTIG: "Bransten has ordered that Moynihan’s deposition must be taken by May 18." @AlisonFrankel @cherzeca My information is that it's already taken place but there's a dispute over document production that may lead to second day Link to comment Share on other sites More sharing options...
valuecfa Posted May 9, 2012 Author Share Posted May 9, 2012 It will be interesting to see Moynihan risks his testimony on successor liability to maintain leverage on the reps & warranty case through the continuation of the transformation trial. This game of chicken is getting close to collision. It looks like he's already been deposed. See below: From Alison Frankel's Twitter feed: christian herzeca @cherzeca @AlisonFrankel @darren151151 from palmer's research at BTIG: "Bransten has ordered that Moynihan’s deposition must be taken by May 18." @AlisonFrankel @cherzeca My information is that it's already taken place but there's a dispute over document production that may lead to second day I'm not aware of what Frankel is referring to. The protective order preventing MBIA's deposition of Moynihan was denied on April 10th. Link to comment Share on other sites More sharing options...
Grenville Posted May 9, 2012 Share Posted May 9, 2012 I'm not aware of what Frankel is referring to. The protective order preventing MBIA's deposition of Moynihan was denied on April 10th. I was assuming she was referring to MBIA deposition of Moynihan in the transformation case (Article 78). My only source here is her feed so I could be off. I'm not sure where else to stay abreast of developments in the BAC legal cases. Here is another post today from her referring to it: Alison Frankel @AlisonFrankel @darren151151 From what I hear, Moynihan depo already took place but a second day may be scheduled. http://twitter.com/#!/AlisonFrankel Link to comment Share on other sites More sharing options...
goldfinger Posted May 9, 2012 Share Posted May 9, 2012 I think it is about the rep and warranty law suit (Bransten) and not the article 78 (Knapnick). I caught that on Christian Herzeca twitter site: "5/4 hearing on docs re moynihan depo on 5/2; $mbi attys ask for sanctions again, say $bac attys act in bad faith, too many clawbacks." "bransten seems to side with $mbi v $bac, saying object to questioning on doc rather than clawing back doc and instructing witness not answer" "bransten says she is getting closer to granting sanctions against $bac; admonishes $bac "not to get her annoyed"" "bransten re sanctions agnst $bac: "But, I am getting closer and closer. You don't want me to get that annoyed that I really consider that what is happening is...an unnecessary delay. If I do it is going to cost a substantial amount of money." gr8 bench trial 4 $bac, huh?" Link to comment Share on other sites More sharing options...
valuecfa Posted May 12, 2012 Author Share Posted May 12, 2012 http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=601846-2009 A bit of additional drama as the trial is set to begin. Link to comment Share on other sites More sharing options...
Grenville Posted May 12, 2012 Share Posted May 12, 2012 http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=601846-2009 A bit of additional drama as the trial is set to begin. Thank you. Link to comment Share on other sites More sharing options...
valuecfa Posted May 16, 2012 Author Share Posted May 16, 2012 Frankel has the transcript from yesterday's arguments from the banks attorneys. You can read it at her site. It's quite long. The banks did well in my opinion Link to comment Share on other sites More sharing options...
Grenville Posted May 16, 2012 Share Posted May 16, 2012 Frankel has the transcript from yesterday's arguments from the banks attorneys. You can read it at her site. It's quite long. The banks did well in my opinion I saw that. I haven't had a chance to read it. Thanks for your opinion. Also I just listened to the last earnings call for MBIA. I haven't followed the MBIA story as closely and will start to follow it now to get more insight regarding the litigation. Do you have any thoughts on how the overhang of the litigation with BAC is affecting MBIA's ability to write new business? ie. Would they be better off economically settling and writing new business versus continuing to litigate this over time? Link to comment Share on other sites More sharing options...
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