While bond insurer Ambac Assurance Corp. has been paying policyholders claims for the last several years, its related segregated account branch has not been doing so. On Tuesday a Wisconsin court rule that the segregated account make cash payments for 25% of claims.
After the economic downturn the segregated account was created to hold poorly performing Ambac assets. Most of them were mortgage-backed securities. The now-bankrupt Las Vegas Monorail was also put into the account.
The monorail, structured as a nonprofit enterprise, sold $650 million of bonds in 2000.
The Circuit Court for Dane County, Wisconsin, also approved the 25% cash payment for future claims to the segregated account.
As of the end of March there were about $3.2 billion in policy claims on the segregated account since the start of the rehabilitation proceedings.
