Ambac denies motion for summary judgment and secures trial date in fraud case against Countrywide and Bank of America
NEW YORK, August 31, 2022–(BUSINESS WIRE)–Ambac Financial Group (NYSE: AMBC), a financial services holding company whose subsidiaries include Ambac Assurance Corporation (“Ambac”), announced that on August 29, 2022, the Supreme Court of the State of New York had rendered a decision denying Countrywide’s motion for summary judgment in the matter entitled Ambac Assurance Corporation and the separate account of Ambac Assurance Corporation c. Countrywide Home Loans, Inc., Countrywide Securities Corp., Countrywide Financial Corp. and Bank of America Corp. (New York State Supreme Court, New York County, Case No. 653979/2014, filed December 30, 2014).
Ambac is pleased with the court’s decision to allow its fraud case against Countrywide and Bank of America to go to trial by jury. The trial is due to begin in January 2024, although the Court has indicated that it may postpone the trial to an earlier date if its schedule allows. Through this case, Ambac seeks to prove that Countrywide made false and intentionally misleading statements to Ambac regarding, among other things, its mortgage origination practices and the alleged quality of its mortgage loans. Ambac is seeking to recover hundreds of millions of dollars in losses, as well as punitive damages.
In addition to this matter, Ambac continues to pursue additional claims against Bank of America and related entities in matters titled Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation c. Countrywide Securities Corp., Countrywide Financial Corp. (aka Bank of America Home Loans) and Bank of America Corp. (New York State Supreme Court, New York County, Case No. 651612/2010, filed September 28, 2010), trial to begin September 7, 2022, and Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation c. First Franklin Financial Corporation, Bank of America, NA, Merrill Lynch, Pierce, Fenner & Smith Inc., Merrill Lynch Mortgage Lending, Inc. and Merrill Lynch Mortgage Investors, Inc. . (New York State Supreme Court, New York County, Case No. 651217/2012, filed April 16, 2012).
The August 29, 2022 decision will not impact estimated subrogation recoveries on Ambac’s balance sheet, which relate only to contractual disputes and not fraud claims.
Ambac Financial Group, Inc. (“Ambac” or “AFG”) is a financial services holding company headquartered in New York. Ambac’s core business is a growing specialty damage underwriting and distribution platform. Ambac also has a run-off legacy financial guarantee business. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, in accordance with our legal and regulatory obligations. To this end, we use our website to transmit information about our activities, including the planned publication of quarterly financial results, quarterly financial, statistical and commercial information. For more information, visit www.ambac.com.
Ambac’s amended and restated certificate of incorporation contains material restrictions on the ability to transfer Ambac common stock. Subject to limited exceptions, any attempted transfer of Common Shares shall be prohibited and void to the extent that, following such transfer (or any series of transfers of which such transfer is a part), any person or group of persons will become a holder of 5% or more of the common stock of Ambac or a holder of 5% or more of the common stock of Ambac increases its interest.
In this press release, statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate”, “project”, “plan”, “believe,” “anticipate,” “intend,” “planned,” “potential,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may”, or the negative of these expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts, but rather represent our beliefs regarding future events, which by their nature may be inherently uncertain and some of which may be beyond our control. Such statements may relate to plans and objectives with respect to the future, among other things. hoses which may change. We alert you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those set forth in the forward-looking statements include, among others, those discussed under “Risk Factors” in our most recently filed quarterly or annual report with the SEC. .
Any or all of management’s forward-looking statements herein or in other publications may prove to be incorrect and are based on management’s current beliefs or opinions. Actual results of Ambac Financial Group (“AFG”) and its affiliates (collectively, “Ambac” or the “Company”) may vary significantly, and there is no guarantee as to the performance of Ambac’s securities. . Among the events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the highly speculative nature of AFG’s common stock and the volatility of the market price of AFG’s common stock; (2) uncertainty regarding the Company’s ability to generate value for the holders of its securities, whether from Ambac Assurance Corporation (“AAC”) and its subsidiaries or from the insurance business property and casualty specialist, distribution activity or related activities; (3) AAC’s inability to achieve expected recoveries, including recoveries from RMBS litigation, included in its financial statements, or changes in estimated recoveries from RMBS litigation over time; (4) failure to collect claims paid on Puerto Rico exhibits or the realization of losses for amounts greater than expected; (5) insufficient reserves established for losses and loss-related expenses and the possibility that changes in loss reserves could result in increased volatility in earnings or financial results; (6) possibility of rehabilitation proceedings or other regulatory interventions against AAC; (7) credit risk across all of Ambac’s businesses, including but not limited to credit risk related to insured residential mortgage-backed securities, student loans and other asset securitizations , government funding obligations (including risks associated with Chapter 9 and other restructuring proceedings), issuers of securities in our investment portfolios and exposures to reinsurers; (8) our inability to effectively reduce assured financial collateral exposures or achieve recoveries or investment objectives; (9) our inability to generate the significant amount of cash necessary to service our debt and financial obligations, including through litigation recoveries or the sale of assets, and our inability to refinance our indebtedness; (10) Ambac’s substantial indebtedness could adversely affect its financial condition and operational flexibility; (11) Ambac may not be able to obtain financing or raise capital on acceptable terms or at all due to its significant indebtedness and financial condition; (12) the impact of catastrophic public health, environmental or natural events, including events such as the COVID-19 pandemic, or global or regional conflicts, on significant portions of our insured portfolio; (13) credit risks related to large single exposures, risk concentrations and correlated risks; (14) risks associated with adverse selection as Ambac’s financial guarantee insurance portfolio is depleted; (15) the risk that Ambac’s risk management policies and practices do not anticipate certain risks and/or the magnitude of the potential for loss; (16) covenants in agreements and instruments that impede Ambac’s ability to pursue or achieve its business strategies; (17) adverse effects on the Company’s results of operations or financial condition resulting from actions taken to reduce financial collateral risks in its insured portfolio; (18) disagreements or disputes with Ambac’s insurance regulators; (19) loss of control rights in transactions for which we provide financial guarantee insurance; (20) adverse tax consequences or other costs resulting from the characterization of excess notes or other AAC obligations as equity; (21) risks associated with changes in the composition of securities in Ambac’s investment portfolio; (22) the negative impacts of changes in prevailing interest rates; (23) events or circumstances that result in the impairment of our intangible assets and/or goodwill that were recorded in connection with Ambac’s acquisition of 80% of the member interests of Xchange Benefits, LLC; (24) risks associated with the expected interruption of the London Interbank Offered Rate; (25) factors that could adversely affect the amount of installment bonuses paid to Ambac; (26) risks related to the determination of the amounts of depreciation taken on investments; (27) the risk of litigation and investigations or regulatory investigations, and the risk of adverse results in connection therewith; (28) actions of stakeholders whose interests are not aligned with the broader interests of Ambac shareholders; (29) system security risks, data protection breaches and cyber attacks; (30) regulatory oversight of Ambac Assurance UK Limited (“Ambac UK”) and applicable regulatory restrictions may adversely affect our ability to realize value from Ambac UK or the amount of value we ultimately realize; (31) failures of services or products provided by third parties; (32) our inability to attract and retain executives, senior managers and other qualified employees, or the loss of such personnel; (33) fluctuations in foreign currency exchange rates; (34) the inability to execute our business expansion plans or the failure of such plans to create value; (35) greater competition for our P&C specialty program insurance business; (36) loss or downgrade of the AM Best rating for our property and casualty insurance company subsidiaries; (37) disintermediation within the insurance industry or increased competition that negatively impacts our general management/underwriting agency business; (38) changes in the law or in the operation of the health market which adversely affect the business model of our general accident and health insurer; and (39) other risks and uncertainties which have not been identified to date.
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Charles J. Sebaski
Managing Director, Investor Relations
Director, Corporate Communications