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Ambac Assurance UK agrees to confidential settlement for Ballantyne

Ambac Financial Group Inc.'s subsidiary Ambac Assurance UK Ltd. agreed to a confidential litigation settlement in the name of Ballantyne Re Plc against J.P. Morgan Investment Management Inc.

The settlement was tied to the management of Ballantyne's investment accounts, which were funded by 2006 proceeds from a note offering tied to a structured reinsurance transaction and guaranteed in part by Ambac UK.

Ballantyne will receive a payment in return for the claims. Ambac disclosed in a March 28 regulatory filing that it expects to see a benefit through losses and loss expenses of about $92 million in the first quarter of 2017. The company said the benefit will be from the reduction of loss and loss expense reserves previously tied to Ballantyne, rather than a direct cash payment to Ambac UK.

The company said the financial impact of the settlement will be described further in its first-quarter 2017 earnings release and quarterly filing with the Securities and Exchange Commission.