Ambac Shareholder Launches Proxy Fight, Nominating 3 for Board

By Michael FlahertyMarketsReuters

A shareholder of Ambac Financial Group Inc launched a proxy fight on Monday, nominating three directors for the board and urging leadership changes at the bond insurer.

Canyon Capital Advisors LLC, which holds a 4.5 percent stake in the company, has been seeking to persuade Ambac to find ways to accelerate the settlement of $4 billion in insurance claims.

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Canyon is also an Ambac creditor, with $259 million of exposure to its bonds, according to filings.

Ambac said separately on Monday it was in talks with shareholders to add two independent directors to the company's board.

Despite the company's announcement, Canyon Capital is pressing ahead with its proxy fight, saying in a statement it nominated Frederick Arnold, chief financial officer at ConvergEx Group, and ACA Financial Guaranty Corp. Director John Brecker, as well as Eugene Davis, chief executive of PIRINATE Consulting Group, to stand for election to Ambac's board at its May 12 annual meeting.

Shareholders have until Tuesday to nominate directors for election at the annual meeting.

Last week, Ambac added to Chief Executive Officer Nader Tavakoli's responsibilities, saying he would also assume the role of CEO of its operating company, Ambac Assurance Corp.

(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Bernadette Baum)