naked capitalism

It appears MBIA’s board did not have the appetite for a showdown with Sptizer and Dinallo over a breakup, which they threatened to implement whether the bond insurer dooperated or not.

It is going to be interesting to see how this goes down with Warburg Pincus, which made a huge bet on MBIA due to Dunton’s selling efforts, and under the assumption the guarantor was a single entity. Not that they have much say, of course.

From Bloomberg:

MBIA Inc. brought back former Chief Executive Officer Joseph Brown to run the company and will consider splitting in two after record losses on subprime debt prompted an 83 percent slump in the share price and put its AAA credit ratings in jeopardy.

Brown, 59, said in an interview today that the world’s largest bond insurer may separate its municipal business from guarantees on subprime-mortgage securities, which caused a net loss of $2.3 billion last quarter. Gary Dunton, who succeeded Brown as CEO in 2004 and has resisted pressure to restructure the Armonk, New York-based company, will leave, MBIA said.