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PMI Group files for bankruptcy

by Staff Reporter7 minute read

Mortgage insurer PMI Group has filed for bankruptcy after an American judge rejected the company's bid to overturn the October seizure of its mortgage-insurance unit by state regulators.

The company sought protection from its creditors in the U.S. Bankruptcy Court, listing assets of $225 million and debts of more than $736 million.

According to court papers, PMI Group was working on a transaction with a subsidiary of the group to write new mortgage insurance.

The subsidiary would have taken control of the business and sought significant new capital investment to fund the business.

However, the move was stopped when the Arizona Department of Insurance seized the mortgage insurance unit in October.

While PMI challenged the move, the courts sided with the Arizona Department of Insurance, stating PMI's mortgage subsidiary is "currently insolvent".

The PMI Group sold its Australian mortgage insurance subsidiary and related Australian holding company to QBE Insurance Group in August 2008.

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