/raid1/www/Hosts/bankrupt/TCR_Public/120825.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

           Saturday, August 25, 2012, Vol. 16, No. 236

                            Headlines

AMBAC FINANCIAL: Has $829.3 Million Loss in June
DEWEY & LEBOEUF: Reports $16.3 Million in July Net Collections
LIGHTSQUARED INC: Reported July Loss When Cash Increased





                            *********



AMBAC FINANCIAL: Has $829.3 Million Loss in June
------------------------------------------------

                     Ambac Financial Group, Inc.
                            Balance Sheet
                         As of June 30, 2012

ASSETS:

Current Assets:
Unrestricted Cash and Equivalents                   $23,875,824
Restricted Cash and Cash Equivalents                  2,500,000
Accounts Receivable                                           -
Notes Receivable                                      1,077,640
Inventories                                                   -
Prepaid Expenses                                        115,393
Professional Retainers                                  282,863
Other Current Assets                                 10,018,470
                                              -----------------
Total Current Assets                                 37,870,190

Property & Equipment:
Real Property and Improvements                                -
Machinery & Equipment                                         -
Furniture, Fixtures, and Office Equipment                     -
Leasehold Improvements                                        -
Vehicles                                                      -
Less: Accumulated Depreciation                                -
                                              -----------------
Total Property & Equipment                                    -

Other Assets:
Amounts Due From Insiders                                     -
Other Assets                                     (2,730,617,959)
                                              -----------------
Total Other Assets                               (2,730,617,959)
                                              -----------------
Total Assets                                    ($2,692,747,769)
                                              =================

LIABILITIES AND OWNERS' EQUITY:

Liabilities Not Subject to Compromise (Postpetition)
Accounts Payable                                              -
Taxes Payable                                        $1,900,000
Wages Payable                                                 -
Notes Payable                                                 -
Rent/Leases - Building/Equipment                              -
Secured Debt/Adequate Protection Payments                     -
Professional Fees                                    13,980,963
Amounts Due to Insiders                                 363,189
Other Postpetition Liabilities                                -
                                              -----------------
Total Postpetition Liabilities                       16,244,152

Liabilities Subject to Compromise (Prepetition):
Secured Debt                                                  -
Priority Debt                                                 -
Unsecured Debt                                    1,707,446,240
                                              -----------------
Total Prepetition Liabilities                     1,707,446,240

Total Liabilities                                 1,723,690,392

Owners' Equity:
Capital Stock                                         3,080,168
Additional Paid-in Capital                        2,172,026,548
Partners' Capital Account                                     -
Owners' Equity Account                                        -
Retained earnings - prepetition                  (3,896,443,042)
Retained earnings - postpetition                 (2,701,940,475)
Adjustments to Owner Equity                           6,838,640
Postpetition Contributions                                    -
                                              -----------------
Net Owners' Equity                               (4,416,438,161)
                                              -----------------
Total Liabilities & Owners' Equity              ($2,692,747,769)
                                              =================

                    Ambac Financial Group, Inc.
                      Statement of Operations
                  For the month ended June 30, 2012

Gross Revenues                                                -
Less: Returns & Allowances                                    -
                                              -----------------
Net Revenue                                                   -

Cost of Goods Sold:
Beginning Inventory                                           -
Add: Purchases                                                -
     Cost of labor                                            -
     Other costs                                              -
Less: Ending Inventory                                        -
                                              -----------------
Cost of Goods Sold                                            -

Gross Profit                                                  -

Operating Expenses:
Advertising                                                   -
Auto and Truck Expense                                        -
Bad Debts                                                     -
Contributions                                                 -
Employee Benefits Programs                                    -
Officer/Insider Compensation                           $131,082
Insurance                                                72,786
Management Fees/Bonuses                                       -
Office Expense                                                -
Pension & profit sharing plans                                -
Repairs & Maintenance                                         -
Rent and Lease Expense                                        -
Salaries/Commissions/Fees                                     -
Supplies                                                      -
Taxes - Payroll                                               -
Taxes - Real Estate                                           -
Taxes - Other                                                 -
Travel & Entertainment                                        -
Utilities                                                     -
Other                                                   164,097
                                              -----------------
Total Operating Expenses Before                         367,965
   Depreciation

Depreciation/Depletion/Amortization                           -
                                              -----------------
Net profit(loss) Before Other Income &
   Expenses                                            (367,965)

Other Income and Expenses:
Other income                                             18,470
Interest Expense                                              -
Other Expense                                       829,134,634
                                              -----------------
Net profit (loss) Before Reorganization Items      (829,484,129)

Reorganization Items:

Reorganization Items:
Professional Fees                                      (181,593)
U.S. Trustee Quarterly Fees                                   -
Interest on Cash from Chapter 11                              -
Gain from Sale of Equipment                                   -
Other Reorganization Expenses                                 -
                                              -----------------
Total Reorganization Expenses                          (181,593)
                                              -----------------
Income Taxes                                                  -
                                              -----------------
Net Profit (Loss)                                 ($829,302,536)
                                              =================

                    Ambac Financial Group, Inc.
            Schedule of Cash Receipts and Disbursements
                 For the month ended June 30, 2012

Cash Beginning of Month                             $24,145,860

Receipts:
Cash Sales                                                    -
Accounts Receivable - Prepetition                             -
Accounts Receivable - Postpetition                            -
Loans and Advances                                            -
Sale of Assets                                                -
Other                                                   513,314
Transfers                                             3,997,732
                                              -----------------
Total Receipts                                        4,511,046

Disbursements:
Gross Payroll                                                 -
Sales, Use, & Other Taxes                                     -
Inventory Purchases                                           -
Secured/Rental/Leases                                         -
Insurance                                                     -
Administrative                                                -
Selling                                                       -
Other                                                  $783,351
Owner Draw                                                    -
Transfers (to DIP Accts.)                             3,997,732
Professional Fees                                             -
U.S. Trustee Quarterly Fees                                   -
Court Costs                                                   -
                                              -----------------
Total Disbursements                                   4,781,083
                                              -----------------
Net Cash Flow                                          (270,037)
                                              -----------------
Cash - End of Month                                 $23,875,824
                                              =================

                       About Ambac Financial

Ambac Financial Group, Inc., headquartered in New York City, is a
holding company whose affiliates provided financial guarantees and
financial services to clients in both the public and private
sectors around the world.

Ambac Financial filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
10-15973) in Manhattan on Nov. 8, 2010.  Ambac said it will
continue to operate in the ordinary course of business as "debtor-
in-possession" under the jurisdiction of the Bankruptcy Court and
in accordance with the applicable provisions of the Bankruptcy
Code and the orders of the Bankruptcy Court.

Ambac's bond insurance unit, Ambac Assurance Corp., did not file
for bankruptcy.  AAC is being restructured by state regulators in
Wisconsin.  AAC is domiciled in Wisconsin and regulated by the
Office of the Commissioner of Insurance of the State of Wisconsin.
The parent company is not regulated by the OCI.

Ambac's consolidated balance sheet -- which includes non-debtor
Ambac Assurance Corp -- showed US$30.05 billion in total assets,
US$31.47 billion in total liabilities, and a US$1.42 billion
stockholders' deficit, at June 30, 2010.

On an unconsolidated basis, Ambac said in a court filing that
it has assets of (US$394.5 million) and total liabilities of
US$1.6826 billion as of June 30, 2010.

Bank of New York Mellon Corp., as trustee to seven different types
of notes, is listed as the largest unsecured creditor, with claims
totaling about US$1.62 billion.

Peter A. Ivanick, Esq., Allison H. Weiss, Esq., and Todd L.
Padnos, Esq., at Dewey & LeBoeuf LLP, serve as the Debtor's
bankruptcy counsel.  The Blackstone Group LP is the Debtor's
financial advisor.  Kurtzman Carson Consultants LLC is the claims
and notice agent.  KPMG LLP is tax consultant to the Debtor.

Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller,
Esq., at Morrison & Foerster LLP, in New York, serve as counsel
to the Official Committee of Unsecured Creditors.  Lazard Freres
& Co. LLC is the Committee's financial advisor.

Bankruptcy Judge Shelley C. Chapman entered an order confirming
the Fifth Amended Plan of Reorganization of Ambac Financial Group,
Inc. on March 14, 2012.  The Plan provides for the full payment of
secured claims and 8.5% to 13.2% recovery for general unsecured
claims.

Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY
NEWS.  The newsletter tracks the Chapter 11 proceeding undertaken
by Ambac Financial Group and the restructuring proceedings of
Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945-
7000).


DEWEY & LEBOEUF: Reports $16.3 Million in July Net Collections
--------------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that Dewey & LeBoeuf LLP collected $20.6 million in
accounts receivable in July, bringing the total to $39.9 million
since the bankruptcy began on May 28.

According to the report, the firm spent $4.3 million in July,
bringing net recoveries in the month to $16.3 million, according
to an operating report filed on Aug.21 with the U.S. Bankruptcy
Court in New York.

The report relates that given net collections and $23.6 million
already on hand, Dewey was able to pay $25.7 million to the
secured lender JPMorgan Chase Bank NA during July.  The operating
report doesn't lay out unbilled fees or accounts receivable.  The
balance sheet shows a receivable of $16.4 million representing
disbursements and expenses incurred for clients.

                       About Dewey & LeBoeuf

New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11
bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the
wind-down of its operations.  The firm had struggled with high
debt and partner defections.  Dewey disclosed debt of US$245
million and assets of US$193 million in its chapter 11 filing late
evening on May 29, 2012.

Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine
LLP and LeBoeuf, Lamb, Greene & MacRae LLP.  At its peak, Dewey
employed about 2,000 people with 1,300 lawyers in 25 offices
across the globe.  When it filed for bankruptcy, only 150
employees were left to complete the wind-down of the business.

Dewey's offices in Hong Kong and Beijing are being wound down.
The partners of the separate partnership in England are in process
of winding down the business in London and Paris, and
administration proceedings in England were commenced May 28.  All
lawyers in the Madrid and Brussels offices have departed. Nearly
all of the lawyers and staff of the Frankfurt office have
departed, and the remaining personnel are preparing for the
closure.  The firm's office in Sao Paulo, Brazil, is being
prepared for closure and the liquidation of the firm's local
affiliate.  The partners of the firm in the Johannesburg office,
South Africa, are planning to wind down the practice.

The firm's ownership interest in its practice in Warsaw, Poland,
was sold to the firm of Greenberg Traurig PA on May 11 for
US$6 million.  The Pension benefit Guaranty Corp. took
US$2 million of the proceeds as part of a settlement.  The Debtor
disclosed $368,117,240 in assets and $348,817,408 in liabilities
as of the Chapter 11 filing.

Judge Martin Glenn oversees the case.  Albert Togut, Esq., at
Togut, Segal & Segal LLP, represents the Debtor.  Epiq Bankruptcy
Solutions LLC serves as claims and notice agent.  The petition was
signed by Jonathan A. Mitchell, chief restructuring officer.

JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the
lenders under the Revolver Agreement, hired Kramer Levin Naftalis
& Frankel LLP.  JPMorgan, as collateral agent for the Revolver
Lenders and the Noteholders, hired FTI Consulting and Gulf
Atlantic Capital, as financial advisors.  The Noteholders hired
Bingham McCutchen LLP as counsel.

The U.S. Trustee formed two committees -- one to represent
unsecured creditors and the second to represent former Dewey
partners.  The Former Partners hired lawyers at Kasowitz, Benson,
Torres & Friedman LLP, as counsel.  The Official Committee of
Unsecured Creditors tapped Deloitte Financial Advisory Services
LLP as its financial advisor.


LIGHTSQUARED INC: Reported July Loss When Cash Increased
---------------------------------------------------------
Bill Rochelle, the bankruptcy columnist for Bloomberg News,
reports that LightSquared Inc. filed an operating report this week
with the bankruptcy court in New York showing a net loss in July
of $52.7 million on revenue of $3.1 million.  Interest expense in
the month was $32 million.

According to the report, the cash flow statement contained in the
report reveals that cash grew $13.3 million in the month, to end
at $224.3 million.  LightSquared spent $4 billion developing a
wireless communications systems using earth-based and satellite
technology.  It filed under Chapter 11 in May after the Federal
Communications Commission denied permission to build out the
system from concern it would interfere with reception by global
positioning devices.

                      About LightSquared Inc.

LightSquared Inc. and 19 of its affiliates filed Chapter 11
bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on
May 14, 2012, as the Company seeks to resolve regulatory issues
that have prevented it from building its coast-to-coast integrated
satellite 4G wireless network.

LightSquared had invested more than $4 billion to deploy an
integrated satellite-terrestrial network.  In February 2012,
however, the U.S. Federal Communications Commission told
LightSquared the agency would revoke a license to build out the
network as it would interfere with global positioning systems used
by the military and various industries.  In March 2012, the
Company's partner, Sprint, canceled a master services agreement.
LightSquared's lenders deemed the termination of the Sprint
agreement would trigger cross-defaults under LightSquared's
prepetition credit agreements.

LightSquared and its prepetition lenders attempted to negotiate a
global restructuring that would provide LightSquared with
liquidity and runway necessary to resolve its issues with the FCC.
Despite working diligently and in good faith, however,
LightSquared and the lenders were not able to consummate a global
restructuring on terms acceptable to all interested parties,
prompting the bankruptcy filing.

As of the Petition Date, the Debtors employed roughly 168 people
in the United States and Canada.  As of Feb. 29, 2012, the Debtors
had $4.48 billion in assets (book value) and $2.29 billion in
liabilities.

LightSquared also sought ancillary relief in Canada on behalf of
all of the Debtors, pursuant to the Companies' Creditors
Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended, in the
Ontario Superior Court of Justice (Commercial List) in Toronto,
Ontario, Canada.  The purpose of the ancillary proceedings is to
request the Canadian Court to recognize the Chapter 11 cases as a
"foreign main proceeding" under the applicable provisions of the
CCAA to, among other things, protect the Debtors' assets and
operations in Canada.  The Debtors named affiliate LightSquared LP
to act as the "foreign representative" on behalf of the Debtors'
estates.

Judge Shelley C. Chapman presides over the Chapter 11 case.
Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to
the Debtors.  Kurtzman Carson Consultants LLC serves as claims and
notice agent.

Counsel to UBS AG as agent under the October 2010 facility is
Melissa S. Alwang, Esq., at Latham & Watkins LLP.

The ad hoc secured group of lenders under the Debtors' October
2010 facility was formed in April 2012 to negotiate an out-of-
court restructuring.  The members are Appaloosa Management L.P.;
Capital Research and Management Company; Fortress Investment
Group; Knighthead Capital Management LLC; and Redwood Capital
Management.  Counsel to the ad hoc secured group is Thomas E.
Lauria, Esq., at White & Case LLP.

Philip Falcone's Harbinger Capital Partners indirectly owns 96% of
LightSquared's outstanding common stock.  Harbinger and certain of
its managed and affiliated funds and wholly owned subsidiaries,
including HGW US Holding Company, L.P., Blue Line DZM Corp., and
Harbinger Capital Partners SP, Inc., are represented in the case
by Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP.

The Office of the U.S. Trustee has not appointed a statutory
committee of unsecured creditors.



                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers"
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR.  Submissions about insolvency-
related conferences are encouraged.  Send announcements to
conferences@bankrupt.com/

On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts.  The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

The Sunday TCR delivers securitization rating news from the week
then-ending.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911.  For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                           *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors" Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland,
USA.  Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Denise
Marie Varquez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R.
Villacampa, Sheryl Joy P. Olano, Carlo Fernandez, Christopher G.
Patalinghug, and Peter A. Chapman, Editors.

Copyright 2012 .  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $775 for 6 months delivered via e-
mail.  Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Peter Chapman
at 240/629-3300.

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