(Reuters) – Ambac Financial Group Inc's attorney said on Monday the bond insurer could exit bankruptcy as soon as Wednesday after the company received court approval of a $101.9 million settlement with the Internal Revenue Service.

Judge Shelley Chapman of the U.S. Bankruptcy Court in Manhattan approved on Monday an agreement in which the U.S. government will receive $1.9 million from Ambac and $100 million from its subsidiary Ambac Assurance Corp.

Ambac also agreed to reduce by $1.1 billion its net operating loss carry-forwards, which the company could otherwise use to reduce future tax liability.

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