MarketWatch – A group of hedge funds, including credit giant King Street Capital, have sued Ambac Financial Group Inc. to try to stop transfers from its main bond-insurance unit to the holding company.
The funds, which also include Aurelius Capital Management, Fir Tree, Monarch Alternative Capital and Stonehill Capital Management, said they own more than $1 billion of residential mortgage-backed securities and other debt insured by Ambac Assurance Corp., or AAC, Ambac’s main insurance subsidiary.
