NEW YORK ( TheStreet)-- MBIA Inc. ( MBI) shares rose more than 20% on Monday, hitting a new 52-week high of $12.93, following dismissal of a legal challenge by Bank of America ( BAC) and Societe Generale ( SCGLY) to its 2009 restructuring. MBIA reorganized in 2009 to protect its municipal bond insurance unit from losses to another unit that insured mortgage securities, which suffered severe losses during the bursting of the U.S. housing bubble in 2008. Several banks challenged the restructuring, though most of them eventually dropped out, with only Bank of America and Societe Generale remaining. New York State Supreme Court Justice Barbara Kapnick dismissed the challenge Monday, though she noted a related legal challenge to the restructuring remains active. The victory for MBIA advances the attempted turnaround of the embattled bond insurer, while also increasing the likelihood of a settlement with Bank of America in a separate dispute over mortgage backed securities (MBS), according to an email message from BTIG analyst Mark Palmer. That case is being heard by New York State Supreme Court Justice Eileen Bransten. The potential settlement of Bransten's case is critical to several MBIA bulls, including Palmer, who believes MBIA shares will eventually reach $25, and portfolio manager Bruce Berkowitz of Fairholme Funds. They argue MBIA will eventually settle for an estimated $3 billion with Bank of America in the case being heard by Judge Bransten. In that case, MBIA has argued Bank of America's Countrywide unit made false representations in mortgages it sold and MBIA agreed to insure. Palmer says Monday's ruling increases pressure on Bank of America to reach a deal in the case before Judge Bransten, because if its challenge to the restructuring had succeeded, it could have avoided the settlement.