Ambac Files for Bankruptcy, Tries to Keep $7 Billion in NOLs, $700 Million in Refunds

NEW YORK—New York-based Ambac Financial Group Inc.(ABK), a holding firm whose key business is providing financial guarantees for financial products such as municipal bonds, Nov. 8 voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York (In re Ambac Financial Group Inc.).

The firm’s bankruptcy filing included an injunction request to preserve $7 billion in net operating losses, which could be used to offset taxes on any taxable income if the company successfully emerges from bankruptcy.

And the firm requested the court to prevent the Internal Revenue Service ...