NEW YORK ( TheStreet) -- MBIA ( MBI) shares were up some 11% late Wednesday morning, apparently on investor optimism the bond insurer may be gaining the upper hand in a complex legal battle with Bank of America ( BAC). MBIA wants Bank of America to assume responsibility for $6 billion worth of mortgage backed securities that MBIA insured. MBIA claims the mortgages, underwritten by Bank of America's Countrywide Financial unit, don't live up to representations made at the time they were chopped up into bonds and sold to investors. Bank of America, meanwhile, is challenging efforts by MBIA to change its corporate structure to prevent losses at MBIA Insurance, which insured the bonds, from affecting its healthier municipal bond insurance unit. In the latest skirmish between the two companies, MBIA wants to amend the terms of certain of its bond issues in order to prevent a potential default by one of its subsidiaries, MBIA Insurance Corp., from triggering a "cross default," which would accelerate payments due on other obligations. The deadline for holders of those bonds to agree to the amendment is 5 pm Eastern time on Wednesday. Bank of America, on the other hand, is trying to block MBIA from amending the bonds, so it can turn up the heat on the cash-strapped insurer in the legal battle. Bank of America has offered to pay 100 cents on the dollar for $329 million worth of MBIA bonds that pay a 5.7% coupon and mature in 2034. However, the bonds were quoted at just 80.5 cents on the dollar early Wednesday, suggesting bondholders may reject the Bank of America offer. On Thursday, following Bank of America's offer to buy the bonds, they traded at 87.5 cents. One motive a bondholder might have to reject the offer would be to profit on MBIA stock, which would likely rally sharply if Bank of America's offer to buy the bonds fails. In a research note published Nov. 16, BTIG analyst Mark Palmer suggested investors could short the MBIA bonds and buy the stock (or a call option on it), and then agree to MBIA's amendment instead accepting the Bank of America offer. "The trade would have to be structured such that the upside associated with the equity/call option would outweigh the net impact of the bond side of the trade," Palmer wrote.