Bloomberg News

Ambac Financial Judge to Rule Tomorrow on Bankruptcy Plan

March 13, 2012

Ambac Financial Group Inc. (ABKFQ)’s bankruptcy judge said she will rule tomorrow on the company’s plan to reorganize its $1.7 billion in debt after hearing hours of objections from shareholders in court today.

U.S. Bankruptcy Judge Shelley Chapman in Manhattan court today heard evidence on the company’s Chapter 11 plan, which calls for it to cancel all of its pre-bankruptcy shares and restructure more than $1.25 billion in senior notes. The plan relies on a proposed settlement with the Internal Revenue Service, which has yet to be consummated.

“I think there’s value to there being certainty and closure in this case,” Chapman said, after hearing hours of arguments yesterday from individual shareholders over why they believed there should be money left for shareholders, and testimony from a financial adviser that there was not.

Ambac Assurance was the second-largest bond insurer before the 2008 financial crisis, when mounting defaults on mortgages swamped the company with claims. It guaranteed about $256 billion of $1.4 trillion in insured municipal debt, according to data compiled by Bloomberg.

The holding company case is In re Ambac Financial Group Inc. (ABK), 10-15973, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Tiffany Kary in New York at

To contact the editor responsible for this story: John Pickering at

Toyota's Hydrogen Man
blog comments powered by Disqus