Ambac tumbled 24% after the bond insurer said it is pursuing a prepackaged bankruptcy filing.

The New York-based company lost $58 million in the latest quarter, which doesn't look too bad compared to its year-ago loss of $2.4 billion. Ambac (ABK) also said the statutory surplus at its Ambac Assurance unit surged to $1.5 billion from $160 million in March, following an agreement this spring to settle some insurance contracts covering bubble-era debt securities.

Ambac's slippery slope

But the company has been warning that a bankruptcy filing is possible ever since Wisconsin's insurance commissioner took action in March to rehabilitate an account holding the company's worst bubble-era risks. 

"Ambac has insufficient capital to finance its debt service and operating expense requirements beyond the second quarter of 2011 and may need to seek bankruptcy protection," the company said in its first-quarter earnings statement this spring and again in its earnings release on Monday afternoon.

Update: The company also noted in its 10-Q filing last night that it is "pursuing a restructuring of its outstanding debt through a prepackaged bankruptcy proceeding." In the first quarter's 10-Q, Ambac said only that it "may consider, among other things, a negotiated restructuring of its outstanding debt through a prepackaged bankruptcy proceeding."

The company has been trying to lighten its debt load by canceling some obligations in exchange for new shares in Ambac, but that strategy looks unlikely to bear fruit as the stock tumbles further below a dollar, where it runs the risk of being delisted by the New York Stock Exchange.

That drama within the larger Ambac drama promises to play on for some time. The NYSE warned Ambac last December that a delisting was possible, after Ambac shares fell below $1 for 30 straight days. The company managed to "cure" that deficiency within the requisite six months when its shares rallied above $1 in April, but the NYSE warned the company again last month that it faces delisting if it can't bring the price back up.

Ambac, whose shares have traded above $1 just twice since early June, said last month it had "notified the NYSE of its intent to cure the price deficiency."

But with the stock falling Tuesday to 66 cents and a weak economy likely adding to future insured losses, a cure is looking more and more remote.