Bond insurer MBIA faces a suit filed in the Federal District Court for the Southern District of New York. The filing alleges its decision to split its mortgage and other structured finance exposures from its public finance obligations hurts its ability to meet its obligations to policyholders.

MBIA called the complaint's claims "broad-based and unsubstantiated allegations" that are "without merit" and said it intends to defend itself against the suit "vigorously."

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