Any prepackaged bankruptcy would require the cooperation of the OCI. If the OCI seized the rest of Ambac Assurance, the remaining group would be completely exposed, making bankruptcy inevitable -- probably Chapter 7. That's why bondholders are unlikely to make demands that would push the insurer into Chapter 11 protection. Unless bondholders have credit default swaps as insurance. An alternative, besides doing nothing, is that bondholders might take some ownership of Ambac in exchange for debt. All of those actions, including the probability of a stock split to adhere to trading regulations, would affect shareholders. Any debt for equity or reverse split would likely dilute the value of the new shares. Ambac hasn't indicated it would willingly hurt stockholders. That's why, without bondholder pressure, Ambac is unlikely to file even a prepackaged bankruptcy at this time. If bondholders could be persuaded to swap debt for equity, without a bankruptcy filing, a leaner Ambac could emerge. In time, it could become an active municipal-bond insurer again. Investors dumped the stock last week, leaving the shares trading at about 50 cents. That could provide enormous opportunities for speculators. After all, Ambac has yet to file its 2009 financial results. -- Reported by Gavin Magor in Jupiter, Fla.