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Ambac 'could file for bankruptcy'

Published on 11 Nov 2009 under category: legal

A major US bond insurer could be forced into bankruptcy protection.

Ambac Financial Group has warned that it may file for Chapter 11 if its cash position does not improve.

The news resulted in a 33 per cent slump in the company's shares yesterday (November 10th)

A filing with the US Securities and Exchange Commission said: "Ambac's available liquidity is currently insufficient to fund its needs beyond the near term and its failure to successfully execute on its current strategies could result in it running out of liquidity in the second quarter of 2011, or potentially sooner."

The document revealed that Ambac may be unable to meet its financial commitments such as operating costs and debts unless its position improves.

Ambac revealed that the restructuring of its debt through bankruptcy proceedings could be an option for the firm.

Recently, US small business lender Advanta Corp filed for Chapter 11 bankruptcy protection.

If you require advice on Insolvency and Bankruptcy please call us on +44 (0)20 7831 0101 and ask for Katherine Sillett.