A federal appeals court ruled in favor of American International Group Inc in concluding that the insurer's $10 billion lawsuit against Bank of America Corp over mortgage losses belongs in state court, not federal court.
The 2nd U.S. Circuit Court of Appeals on Friday threw out a lower court order denying AIG's bid to move the case to a New York state court. AIG's lawsuit was filed in August 2011 but has been largely on hold because of the venue fight.
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AIG accuses Bank of America and its Countrywide and Merrill Lynch units of making fraudulent misrepresentations in connection with $28 billion of residential mortgage-backed securities AIG bought, causing large losses for the insurer.
(Reporting by Jonathan Stempel in New York; editing by John Wallace)