Ambac Bonds Decline After Hedge Funds File Motion
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Ambac Financial Group Inc. bonds fell to the lowest in almost three months after a group of hedge funds filed a motion to prevent the insurer from taking assets out of a bond-guaranty unit.
The policyholders filed the motion in the circuit court of Dane County, Wisconsin, to stop Ambac Financial Group from siphoning off dividends from its Ambac Assurance unit or using net operating losses without compensating the subsidiary, according to a statement yesterday. The holding company has said it may file for bankruptcy.