(Updates with company contact in fifth paragraph.)
Oct. 24 (Bloomberg) -- MBIA Inc. and Third Avenue Trust ended a 2009 lawsuit with each agreeing to pay their own costs and attorney fees.
Third Avenue, based in New York, sued Armonk, New York- based MBIA in December 2009 in New York state Supreme Court over $400 million in notes, according to the complaint.
MBIA “represented to Third Avenue and other potential investors that it intended to use the funds raised to pursue the primary business of the company, insuring public finance bonds,” plaintiff’s lawyers said in court papers.
Subsequently, the MBIA finance credit portfolio went “from bad, to worse than bad,” and the bond value fell 36 percent, Third Avenue lawyers wrote. The lawsuit sought unspecified damages and fees. It was dropped by agreement of both parties Oct. 20, according to a New York State Supreme Court document. The document didn’t specify a reason why both parties dropped the suit.
Scott Edelman, an attorney for Third Avenue, didn’t immediately return an e-mailed message seeking comment on the agreement. Kevin Brown, an MBIA spokesman, declined to comment.
The case is Third Avenue Trust v. MBIA Inc., 650756/2009, New York state Supreme Court (New York County).
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