Ambac Financial Group Inc. reported a profit in its first reporting period after emerging from bankruptcy protection in early May, helped by sharply lower costs, MarketWatch.com reported yesterday. The bond insurer, which sells protection on mortgage securities, filed for chapter 11 bankruptcy protection in late 2010 after the Internal Revenue Service questioned the accounting that allowed the company to receive more than $700 million in tax refunds. The company completed its financial restructuring and came out of bankruptcy protection on May 1. Under the terms of the restructuring, all allowed claims of Ambac's former creditors were discharged and those creditors received new stock, and in some cases, new warrants, issued by the reorganized company. All stock of the company that existed prior to Ambac's emergence from bankruptcy was canceled. For the two-month period from May 1 to June 30, the newly emerged company reported a profit of $205.7 million. The predecessor company posted a loss of $811.1 million during the second quarter a year ago.
