Ambac seeks 60-day extension of exclusive period for soliciting votes

By Jim Witters

Wilmington, Del., Oct. 24 - Ambac Financial Group, Inc. is seeking a 60-day extension of its exclusive period for soliciting acceptances of its amended plan of reorganization, according to documents filed Monday with the U.S. Bankruptcy Court for the Southern District of New York.

The company's exclusive period is scheduled to expire Dec. 5. A hearing on the motion is scheduled for 2 p.m. ET on Nov. 7.

The extension would move the exclusivity expiration date to Feb. 3, 2012.

The debtor says it needs the additional time because it is involved in negotiations with the Internal Revenue Service over an $807 million claim, according to court documents.

The IRS claim and a Dane County, Wis., Circuit Court case involving rehabilitation of the debtor's segregated account are the two remaining issues impeding plan confirmation, the motion states.

"Given the size of the IRS claims and the treatment which must be afforded to such claims if and to the extent they are allowed, a successful resolution of the IRS claims is crucial to the effectuation of the debtor's second amended plan and the amended plan settlement that has taken the debtor and the major stakeholders in the debtor's estate more than a year to negotiate," the motion states.

Additionally, voting on the plan will not be completed until Nov. 23, and the confirmation hearing is not scheduled until Dec. 8, after the exclusive solicitation period expires, the motion states.

"A further extension of the solicitation exclusivity period will provide the debtor with sufficient time to address any unforeseen solicitation issues and move expeditiously towards plan confirmation," the motion states.

As previously reported, Ambac filed on Sept. 21 an amended plan of reorganization and related disclosure statement after reaching an agreement on all outstanding tax and expense-related issues between the company and Ambac Assurance Corp.

Ambac Financial Group, Inc. is a New York-based company that provides financial guarantee insurance for public and structured finance obligations. The company filed for bankruptcy on Nov. 8, 2010, and its Chapter 11 case number is 10-15973.

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