Federal Guaranty Insurance rehabilitation plan hearing set for Dec. 18

By Caroline Salls

Pittsburgh, Oct. 10 - The hearing on approval of the rehabilitation plan filed by Federal Guaranty Insurance Co.'s rehabilitator is scheduled for Dec. 18, according to a notice to holders of bonds insured by FGIC.

Bond trustee U.S. Bank told the bondholders in the notice that the proposed plan would likely result in lesser cash payments on policy claims than provided in the original terms of the policies.

As previously reported, the plan was filed on Sept. 27 with the Supreme Court of the State of New York.

The rehabilitator is the Superintendent of Financial Services of the State of New York.

FGIC is a direct, wholly owned subsidiary of FGIC Corp., a New York-based privately held insurance company. The company filed for bankruptcy on Aug. 3, 2010 in the U.S. Bankruptcy Court for the Southern District of New York. The Chapter 11 case number is 10-14215.

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