Ambac: Congressional joint committee won't object to settlement offer

By Caroline Salls

Pittsburgh, Dec. 28 - Ambac Financial Group, Inc. said the Congressional Joint Committee on Taxation will not object to an offer made to settle Internal Revenue Service claims and related lawsuits.

According to a company news release, the committee reviewed the settlement offer made to the United States by Ambac, its official committee of unsecured creditors, Ambac Assurance Corp., the segregated account of Ambac Assurance, the court-appointed rehabilitator of the segregated account and the Wisconsin Office of the Commissioner of Insurance.

The settlement resolves the claims filed by the IRS against Ambac's estate in its Chapter 11 proceeding, Ambac's related adversary proceeding against the United States and other related lawsuits brought by the United States against or involving Ambac Assurance and/or the segregated account.

Ambac said the joint committee will issue a response of "no adverse criticism" to the settlement offer, subject to the satisfaction of conditions, which include execution of acceptable closing documentation, approval by the U.S. Bankruptcy Court for the Southern District of New York and the payment by Ambac of $1.9 million and the payment by Ambac Assurance and/or the segregated account of $100 million to the United States.

The company said the satisfaction of these conditions and the receipt of a "no adverse criticism" response would, in turn, satisfy some outstanding conditions to the effectiveness of Ambac's fifth amended plan of reorganization.

Ambac Financial Group 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 in the U.S. Bankruptcy Court for the Southern District of New York under Chapter 11 case number 10-15973.

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