Wisconsin Court Rejects Appeal of Ambac Rehabilitation Order
By Tiffany Kary and Andrew Harris - Mar 8, 2012 11:00 AM ET ..A plan to rehabilitate part of failed bond insurer Ambac Assurance Corp. will stand after Wisconsin’s Supreme Court rejected a U.S. appeal of a lower court ruling that approved it.
The plan was approved in January 2011 by Judge William D. Johnston in Dane County, Wisconsin, circuit court, for a segregated $50 billion portfolio of Ambac policies insuring mortgage-backed securities and other corporate liabilities. The plan repaid some policyholders while barring the U.S. Internal Revenue Service from pursing claims against the account.
The U.S. had appealed the court’s approval of the plan, saying it had made a tentative tax refund to Ambac of more than $700 million, with the understanding that it could take back any amount that was wrongly refunded.
The state Supreme Court said in its 6-0 ruling today that the U.S. overlooked “fundamental appellate principles” by failing to raise its issues before Johnston.
The U.S. “remained on the sidelines while the rehabilitation was proceeding in the circuit court and chose not to raise its objections until after the final order was entered,” Justice N. Patrick Crooks wrote in the Supreme Court’s ruling.
New York-based Ambac Financial Group Inc. (ABKFQ), which owns the Wisconsin-based insurer, filed for Chapter 11 bankruptcy court protection on Nov. 8 in Manhattan, claiming $1.68 billion in liabilities. The company filed its third amended plan to reorganize in February, which included a proposed settlement with the IRS.
The case is In the matter of The Rehabilitation of Segregated Account of Ambac Assurance Corp., 2010cv001576, Dane County, Wisconsin, Circuit Court (Madison). The holding company bankruptcy case is In re Ambac Financial Group Inc. (ABK), 10-15973, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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|Autor (Datum des Eintrages):||silverjohn (09.03.12 20:48:41)|
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