Bernstein, Litowitz, Berger & Grossmann on Tuesday filed a motion in Manhattan federal court seeking approval of a proposed $68 million deal with monoline insurer MBIA. The motion asserts that, taking into account MBIA’s “financial condition” and demands on its insurers from mortgage-backed securities litigation, the settlement is a good deal for investors. “That’s a substantial settlement, particularly given what would be a realistic recovery in this case,” said Steven Singer of Bernstein Litowitz. He added that alleged damages in the case amounted to only “a few hundred million dollars.”
In its motion to Southern District Judge Kenneth Karas, Bernstein Litowitz said the parties reached agreement on July 7 in a mediation session. Insurance will fully cover the settlement, according to MBIA’s quarterly report. “Although we continue to believe that our CDO exposure was fully disclosed, we are pleased to have reached a settlement that puts this matter behind us,” Kevin Brown, a spokesman for MBIA, said in a statement. MBIA was represented by Steven Klugman of Debevoise & Plimpton.
