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Ambac Sues U.S., to block seizure

Ambac Financial Group Inc has sued the US to block IRS seizure of $700 million of tax refunds.

Ambac Sues U.S., Says IRS May Ruin Bankruptcy- Reuters
Bond insurer Ambac Financial Group Inc has sued the United States to block seizure of $700 million of tax refunds that it said could destroy its ability to reorganize in bankruptcy court.

IRS questions over Ambac’s accounting for the refunds, and for $7.3 billion of operating losses it hoped to use to offset future taxes, were among the reasons Ambac filed for bankruptcy on Monday, sooner than expected, court papers show.

Ambac was once the second-largest U.S. bond insurer and guaranteed payments on more than $550 billion of debt.

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