A group of 18 financial institutions sued MBIA Inc., claiming the bond insurer's decision to split its businesses earlier this year was fraudulent and left one of the units effectively "insolvent."

The lawsuit, filed in New York state court, was brought by U.S. and foreign banks, including J.P. Morgan Chase & Co., Bank of America Corp., Morgan Stanley, Canadian Imperial Bank of Commerce, Barclays PLC and UBS AG.

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