Ambac Gets Four-Month Extension as Judge Calls Disputes ‘Ugly’ Ambac Financial Group Inc., the bankrupt holding company for a failed bond insurer, won a four- month extension of its time to reorganize after a judge called disputes in the case “ugly” and ordered mediation of a tax dispute between Ambac and the U.S. U.S. Bankruptcy Judge Shelley Chapman denied Ambac Financial’s request for a six-month extension of its control over a reorganization in Manhattan bankruptcy court today. During a seven-hour hearing as creditors disputed the extension, Ambac Chief Executive David W. Wallis testified that if creditors get their way with tax benefits, it could further harm both the companies and holders of municipal debt. Creditors said Ambac could run out of money if it gets too much time to reorganize, and accused company executives of having a conflict of interest.
Her ruling will gives Ambac until early July to file a Chapter 11 plan. Sword of Damocles “You are waving an enormous sword of Damocles,” Chapman told Princi. Muni Debt Receivership Investments. Dewey, Other Firms Prepare for Possible Ambac Bankruptcy. Lenders Beware: The Threat of Equitable Subordination in Bankruptcy Cases. Desperate times call for desperate measures, so in the next few years lenders are likely to see more threats by debtors, bankruptcy trustees or competing creditors to subordinate their claims. Section 510(c) of the Bankruptcy Code grants the bankruptcy courts authority to relegate certain creditors’ claims to the ‘bottom of the barrel’ in terms of priority of payment under the “equitable subordination” doctrine.
However, exactly what constitutes sufficient grounds for equitable subordination in a particular case remains the subject of much dispute. This uncertainty, combined with the potential for a lender to suffer a tremendous loss, is precisely what makes the threat of equitable subordination so daunting in many cases.
In a successful equitable subordination action, all or part of any secured or unsecured claim may be subordinated. The requirements for determining whether equitable subordination is merited have been summarized as follows: © 2014 Poyner Spruill LLP. Ambac Financial Group, Inc. Ambac Default-Swap Traders Seek Ruling on Bankruptcy Trigger. Traders are looking to trigger $1.56 billion in credit-default swap protection on Ambac Financial Group Inc. (ABKFQ) after the holding company for the bond insurer filed for bankruptcy.
The International Swaps and Derivatives Association’s determinations committee will rule if swaps on Ambac Financial Group should be settled, the New York-based association said today on its website. Contracts protecting a net $1.56 billion of Ambac Financial debt were outstanding as of Oct. 29 according to the Depository Trust Clearing Corp., which runs a central repository for the credit swaps market. Ambac Financial filed for bankruptcy yesterday in Manhattan to reschedule payments on more than $1 billion in bonds and other claims. Ambac Financial is the holding company of Ambac Assurance Corp., which has about $57.6 billion in policies insuring credit derivatives and other financial products that are being restructured by Wisconsin regulators, according to the company.
DTCC › Home. Anthony Princi | Morrison Foerster. Anthony Princi is a partner in Morrison & Foerster's Business Restructuring & Insolvency Group. His practice is concentrated in debt capital markets and restructuring, and he has extensive experience in representing corporate debtors and secured and unsecured creditors' committees in cross-border bankruptcy proceedings and out-of-court restructurings. Mr. Princi regularly represents "special situations" investors in private debt and equity transactions. Mr. Mr. IRS Challenges $8 Billion in Ambac Financial Refunds, Assets. Ambac Files Chapter 11; Shares Down 60% - Stocks To Watch Today.
By Tiernan Ray Ambac shares hit an all-time intraday high of $96.10 on May 18th, 2007 Confirming an earlier report by Bloomberg news, bond insurer Ambac Financial Group (ABK) this evening said it filed chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York, and that it will continue to operate as a debtor-in-possession business during the proceedings. Ambac shares fell 30 cents, or almost 60%, to 22 cents 34 cents, or 65%, to 18 cents in late trading. The shares had risen almost 4% during the regular session. Ambac had $1.62 billion in debt at the end of June, it said. The company was unable to raise capital to avoid the filing, and was not able to reach agreement with senior bond holders on a pre-packaged bankruptcy, it said. The company has agreed to a term sheet, however, with the bond holders that may speed its way out of bankruptcy, it said.