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A heated phone call last December between the new chief executive of Financial Guaranty Insurance Corp. and a top executive of Ambac Financial Group Inc. put a sudden end to FGIC's raid on Ambac-and led to a declaration of truce between the rivals for the next 14 months.
The emotions understandably ran deep on both sides. FGIC's new CEO, Frank Bivona, happened to be none other than Ambac's former chief financial officer and vice chairman, and therein lies a tale.
Bivona left Ambac after 18 years at that firm in early 2002-and joined FGIC in December 2003 in an unusual circumstance. A few months earlier, when a group of private investors was deep in negotiations to buy FGIC from GE Capital Corp. for $2.16 billion, the investors had insisted on a condition. Before agreeing to a deal, they insisted that Bivona, whose qualifications they viewed as ideal, had to agree to come aboard and run their new prize (see IDD feature, "CEOs First, Assets Later," 9/29/03, p. 28). Bivona gave the unofficial nod, and on Dec. 18, the purchase became final, and Bivona officially...