Bond insurer Ambac Financial Group Inc. (ABK) announced Tuesday that Sean Leonard has resigned as Senior Vice President and Chief Financial Officer of Ambac to ‘pursue other interests.’
Leonard’s resignation is effective immediately and comes just weeks after Ambac said it may be forced to file for bankruptcy protection if it cannot improve its cash position.
In a filing with the Securities and Exchange Commission Nov. 9, the company said its available liquidity was insufficient to fund the firm’s needs beyond the near term and its failure to successfully execute on its current strategies could result in it running out of liquidity in the second quarter of 2011, or potentially sooner.
Ambac also said that based on the holdings of cash, short term investments and bonds of $164.7 million as of September 30, 2009, it will have sufficient liquidity to satisfy its needs through the second quarter of 2011. But noted, that “no assurances can be given that Ambac will be successful in executing any or all of its strategies.
If Ambac is unable to execute these strategies, said the filing, it will consider seeking bankruptcy protection without agreement concerning a plan of reorganization with major creditor groups.
Leonard resignation is another possible sign that the embattled bond insurer, which has had ratings downgrades significantly damage its ability to generate new business, is creeping closer to bankruptcy.
Leonard was hired by Ambac in 2005, according to the company. Those who worked under him will report to CEO David Wallis until a replacement is found, Ambac said.
Shares of Ambac, which have lost almost all their value since 2005 as guarantees it wrote on mortgage-related securities turned toxic, fell 9 cents, or 10%, to 81 cents in afternoon trading.
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