As we previously report here, Ambac Financial Group, Inc. (“AFG”), the holding company for the bond insurer, Ambac Assurance Corp. (“AAC”), filed for bankruptcy in November 2010 after it was unable to raise additional capital or come to terms with its debt holders.
On September 21, 2011, AFG and the Wisconsin Office of the Commissioner of Insurance, as Rehabilitator of the Segregated Account of AAC, reached an agreement to address outstanding tax and expense issues. This agreement came in response to the objections the Rehabilitator raised in July 2011 that AAC would have to pay too much in tax treatment to AFG in the initial reorganization plan.
The Rehabilitator issued another press release in connection with the revised reorganization plan, available here, to say that the Rehabilitator is pleased with the negotiated settlement with AFG and “recognizes the advantages of reducing uncertainty and avoiding unnecessary litigation, as achieved by this settlement.”
We will continue to monitor any developments relating to AFG here at InsureReinsure.com.