The Daily Docket: Ambac Spars with IRS Over $700 Million

Ambac Financial Group Inc. said it doesn’t owe hundreds of millions of dollars in back taxes that the Internal Revenue Service is going after, a claim that contributed to Ambac’s filing for Chapter 11 bankruptcy protection last fall. Read the Daily Bankruptcy Review story here.

Real-estate investor HFZ Capital Group filed its Chapter 11 plan of reorganization for One Madison Park, pledging up to $200 million to take the Manhattan condominium tower out of Chapter 11 protection. Read the Daily Bankruptcy Review Small Cap story here.

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Some of the world’s biggest banks are jumping into a multibillion-dollar market that buys up victims’ claims in the Bernard Madoff Ponzi scheme, including two banks that have been sued in connection with the fraud. Read The Wall Street Journal story here.

A group of home builders, including KB Home, Beazer Homes USA Inc. and Toll Brothers Inc., has agreed to pay lenders as much as $340 million to settle legal actions related to Inspirada, a failed land deal outside Las Vegas, WSJ reports.

With perhaps 40% of its public servants facing imminent layoffs, debt-laden Jefferson County, Ala., is preparing for tough times, WSJ says.

Lehman Brothers Holdings Inc. CEO Bryan Marsal tells CNBC that creditors can expect to recover $65 billion, up $5 billion from the last estimate.

Bloomberg profiles Howard Marks chairman of Oaktree Capital Management LP, the biggest distressed-debt investor in the world.

A prominent Florida law firm, pummeled by a federal judge’s recent criticism in open court, is now the subject of an inquiry by the state bar into its bankruptcy practices, the Orlando Sentinel reports.