The Am Law Litigation Daily Names Bob Giuffra “Litigator of the Week”July 1, 2011
On July 1, Mr. Giuffra was featured as The Am Law Litigation Daily's “Litigator of the Week” for his leading role in securing a major victory in the Court of Appeals of the State of New York –the latest stop in ongoing “monster” litigation brought by a group of 11 prominent financial institutions challenging MBIA Insurance's (“MBIA”) $5 billion restructuring in 2009. On June 28, in a 5-2 decision, the court reversed an intermediate state appellate court's January 2011 ruling, which itself overturned the trial court's denial of MBIA's motion to dismiss. The most recent decision reinstates a fraudulent conveyance suit arguing that the transfer by MBIA's parent of more than $5 billion of MBIA's assets to another subsidiary – a transfer approved by the then-Superintendant of the New York State Insurance Department – left MBIA unable to pay claims on policies covering S&C's clients' complex financial instruments. Mr. Giuffra made the oral arguments before the court. “Giuffra, who clerked for U.S. Supreme Court Chief Justice William Rehnquist, told us he prepared for his May argument before the Court of Appeals knowing the judges would appreciate a clear theory that would allow him to answer questions quickly and consistently,” Am Law reported. Mr. Giuffra told the publication, "Our position was relatively straightforward: Unless the legislature had expressly barred debtor-creditor law or contract claims in connection with transactions approved by the superintendent, policyholders had the right to go forward because policyholders had no notice or opportunity to be heard before the approval." The banks will continue to pursue the suit along with an “Article 78” action against the New York State Insurance Department challenging its approval of the restructuring. (S&C also represents the banks in that action.) Mr. Giuffra told Am Law he believes the banks will win both cases. “There was no good reason for the superintendent to have approved a massive restructuring transaction in secret for the benefit of an insurance holding company and its executives and shareholders without even consulting the policyholders,” he said.