ISN'T IT RICH? - American Business Media

MBIA and other monolines lost billionsinsuring toxic mortgage-backed securities.So they went after the banks that securitizedthe loans. So far they’re winning.THE AVENGERSWill they be the ones who make the banks payfor the mortgage mess?By Nate RaymondPhotographs By Steven LaxtonONLOOKERS CROWDED the aisles and doorwayof the Manhattan courtroom of Justice EileenBran sten on October 5. The New York state courtjudge normally wouldn’t have allowed a standing room audience.But with lawyers, investors, and court watchers coming from asfar away as San Francisco and Cleveland to squeeze into room442 at 60 Centre Street, Bransten made an exception. After all,she said, her ruling would have “a major impact on lots of people.”If anything, her words were an understatement.The plaintiffs in the case, MBIA Inc. and Syncora HoldingsLtd., are just two of the monoline insurers who have launcheda fusillade of litigation against big banks over toxic mortgagebackedsecurities. Insuring securities backed by bad loans hascost the monolines billions and pushed some of them intobankruptcy; now the insurers are fighting to recover their lossesfrom the banks that made the loans and packaged them. JusticeBransten’s ruling on this latest issue—to what extent MBIAand Syncora would have to prove fraud by defendants Bankof America Corporation and Countrywide Financial Corporation—willlikely affect manyof the almost three dozen otherWILLING TO TAKE ON THEBANKS: QUINN EMANUEL’SPHILIPPE SELENDY (LEFT)AND PETER CALAMARImonoline suits against the banks.In court that day, Countrywidecounsel Mark Holland ofGoodwin Procter argued that theFor more on mortgage-backed securities litigation, visit www.litigationdaily.com82 March 2012 | americanlawyer.comThe American Lawyer | March 2012 83