Lawyers for Ambac Financial Group said the bankruptcy plan submitted by the Wisconsin insurance regulator was unacceptable, and the company intends to issue its own plan in June.

Wisconsin’s Office of the Commissioner of Insurance, which oversees Ambac Assurance Corp., gave the Ambac lawyers a proposal in early May that they found “very disappointing,” and told Judge Shelley Chapman so in court Wednesday.

“We found it very disappointing and the creditors committee found it disappointing too,” said Peter Ivanick, a lawyer at Dewey & LeBoeuf who represents Ambac. He declined to comment on what specifically was disappointing about the plan, saying it would not help the case to go into details.

New York-based Ambac Financial, the bankrupt holding company for defunct bond insurer Ambac Assurance, filed under Chapter 11 in November 2010.

Wisconsin-based Ambac Assurance was once the second-largest municipal bond insurer until it ran into serious trouble in late 2007 because of decaying credit quality in its structured finance policies, which included contracts guaranteeing to cover losses on mortgage bonds and credit default swaps.

The Wisconsin regulator has been highly involved in efforts to reach an agreement between Ambac Financial and Ambac Assurance since they became involved in this financial dispute. The regulator also oversees the segregated account, which was established on March 24, 2010, to separate certain liabilities that presented serious financial hazards to the company and its policyholders. It holds roughly $50 billion in policies.

In addition to not agreeing with the current proposal submitted by the regulator, Ivanick said he will file a plan during the month of June “with or without the agreement of the OCI.”

Ivanick said he was encouraged by the creditors committee to file a stand-alone plan.

“We are continuing to talk to the OCI and we hope the OCI comes back with an improved offer,” Ivanick said. “But, in any case, we are filing a plan that embodies an OCI deal or one that does not embody an OCI deal.”

It is not clear what the implications might be if the new proposal does not include a deal with the insurance office. Ivanick said it is possible the OCI may find that to be a hostile act and “then we might be in litigation.”

'It remains our objective to reach a consensual agreement amongst all constituents,” said a spokesman for Ambac. “In the event we are not successful in reaching such an agreement, Ambac will submit a plan that it deems most achievable, and will do so prior to the expiration of our exclusivity period in early July.”

A spokesman for the OCI did not return calls seeking comment.

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