Official Statement Airport Commission City and County of San ...

complaint also alleges that certain transfers under the Transactions were fraudulent in that they allegedly left MBIA
Corp. with “unreasonably small capital” (Count II), “insolvent” (Count III), and were made with an “actual intent to
defraud” (Count IV). The complaint seeks a judgment (a) ordering the defendants to unwind the Transactions,
(b) declaring that the Transactions constituted a fraudulent conveyance, and (c) damages in an unspecified amount.
Defendants filed their motion to dismiss on April 27, 2009. On October 28, 2009 the Court of Chancery issued an
order granting Defendant’s motion to dismiss this case without prejudice.
On May 13, 2009, a complaint was filed in the New York State Supreme Court against the Company and
its subsidiaries, MBIA Corp. and National, entitled ABN AMRO Bank N.V. et al. v. MBIA Inc. et al. The plaintiffs, a
group of 19 domestic and international financial institutions, purport to be acting as holders of insurance policies
issued by MBIA Corp. directly or indirectly guaranteeing the repayment of structured finance products. The
complaint alleges that certain of the terms of the transactions entered into by the Company and its subsidiaries,
which were approved by the New York State Department of Insurance, constituted fraudulent conveyances and a
breach of the implied covenant of good faith and fair dealing under New York law. The complaint seeks a judgment
(a) ordering the defendants to unwind the Transactions (b) declaring that the Transactions constituted a fraudulent
conveyance, (c) declaring that MBIA Inc. and National are jointly and severally liable for the insurance policies
issued by MBIA Corp., and (d) damages in an unspecified amount. Defendants filed their motion to dismiss on
June 11, 2009.
On June 15, 2009, the same group of 19 domestic and international financial institutions who filed the
above described plenary action in New York State Supreme Court filed a proceeding pursuant to Article 78 of New
York’s Civil Practice Law & Rules in New York State Supreme Court against the New York Insurance Department,
Eric Dinallo in his capacity as Superintendent for the Department, and MBIA Inc. and its subsidiaries, MBIA Corp.
and National, entitled ABN AMRO Bank N.V. et al. v. Eric Dinallo, in his capacity as Superintendent of the New
York Insurance Department, the New York State Insurance Department, MBIA Inc. et al. In its motions to dismiss
the three above-referenced plenary actions, MBIA Inc. argued that an Article 78 proceeding is the exclusive forum
in which a plaintiff may raise any challenge to the Transactions approved by the Superintendent and the Department.
The petition seeks a judgment (a) declaring void and to annul the approval letter of the Superintendent of Insurance,
(b) to recover dividends paid in connection with the Transactions, (c) declaring that the approval letter does not
extinguish plaintiffs’ direct claims against MBIA Inc. and its subsidiaries in the plenary action described above.
MBIA Inc. believes that the litigation described above filed against it and its subsidiaries in connection
with the Transactions is without merit and intends to contest it vigorously.
Incorporation of Certain Documents by Reference
The following documents filed by MBIA Inc. with the Securities and Exchange Commission (the "SEC")
are incorporated by reference into this appendix:
MBIA Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008;
MBIA Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009; and
Any documents, including any financial statements of National that are included therein or attached as
exhibits thereto, or any Form 8-K, filed by MBIA Inc. pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of MBIA Inc.’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, and
prior to the termination of the offering of the Series 2009 Bonds offered hereby shall be deemed to be incorporated
by reference in this appendix and to be a part hereof from the respective dates of filing such documents.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein, or
contained in this appendix, shall be deemed to be modified or superseded for purposes of this appendix to the extent
that a statement contained herein or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to constitute a part of this appendix.
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