JPMorgan Chase & Co and Barclays Plc dropped their opposition to MBIA Inc's plan to restructure its businesses.

Shares of MBIA , the largest U.S. bond insurer before it suffered major losses from insuring subprime and other risky securities, closed up 8.8 percent.

JPMorgan Chase and Barclays disclosed their decision not to oppose MBIA's plan to split its municipal bond insurance business from its structured finance operations in a filing with the New York State Supreme Court in Manhattan.

The banks did not give a reason, and they did not immediately return calls for comment.

MBIA announced the planned split in 2009, in a restructuring overseen by the state's insurance commissioner.

The company has said the split would allow it to continue to guarantee municipal bonds, allowing local governments to borrow more cheaply.

But opponents said it would fraudulently transfer billions from its MBIA Insurance unit, leaving it without sufficient funds to cover claims stemming from guarantees on complex financial instruments.

MBIA declined to comment.

More than one dozen major banks remain as plaintiffs opposing the MBIA plan, including Citigroup Inc , Morgan Stanley and HSBC Holdings Plc .

MBIA and rival Ambac Financial Group Inc struggled after they expanded into providing guarantees on riskier debt, such as mortgage-backed securities, which rapidly lost value following the housing market crash.

MBIA shares closed up 84 cents at $10.36.

The cases are ABN Amro BANK NV et al v. MBIA Inc et al, New York State Supreme Court, New York County, No. 601475/2009, and ABN Amro Bank NV et al v. Dinallo et al in the same court, No. 601846/2009.

(Reporting by Tom Hals; Editing by Steve Orlofsky)

ABN Amro Jpmorgan chase Barclays