Federal Court Retains Jurisdiction Over MBIA Restructuring Dispute

NEW YORK - A New York federal judge has refused to decline jurisdiction over a dispute arising from the restructuring of MBIA Insurance Corp., ruling that federal jurisdiction would not challenge a state administrative or judicial order and that there is no parallel state court proceeding. Aurelius Capital Master Inc. v. MBIA Insurance Corp., No. 09-2242 (S.D. N.Y.).

On Feb. 11, Judge Richard J. Sullivan of the U.S. District Court for the Southern District of New York further ruled that dismissal on collateral attack grounds is not appropriate at this stage of the proceedings.

MBIA Inc. is the parent …