An attorney representing banks holding MBIA Insurance policies guaranteeing structured finance products argued Tuesday that the $5 billion restructuring of MBIA’s insurance subsidiary was done without giving a group of policy-owning banks a chance to object.

The case, being heard in the New York State Court of Appeals — one of two lawsuits filed by the banks contesting MBIA’s restructuring — claims the value of the company’s guarantee for its structured finance portfolio was irreparably harmed when the insurer split it from its safer portfolio of insured municipal bonds.

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