Embattled mortgage insurer The PMI Group, Inc., caved in to state-imposed roadblocks by voluntarily filing for Chapter 11 bankruptcy Wednesday.
The move comes a day before a major U.S. holiday and on the heels of a seizure of subsidiaries PMI Mortgage Insurance Co. and PMI Insurance Co. by state regulators with the Arizona Department of Insurance
State regulators corralled the company by prohibiting new insurance policies when PMI failed to meet minimum capital requirements.
Much of the statement released by PMI laid blame for the decision on state regulators, and in particular the department's director.
""The Company has concluded that the Interim Order and the prospect of the appointment of a receiver in respect of MIC make it impractical for the Company to pursue the
PMAC Transaction at this time without bankruptcy protection,"" PMI wrote in a statement it issued earlier.
""As a consequence, the Company's Board of Directors has concluded that filing for chapter 11 protection is in the best interest of the Company's stakeholders and is the most effective means of preserving the Company's remaining assets for the benefit of its stakeholders,"" it added.
Bill Horning, the spokesperson for PMI, did not immediately return request for comment.
Erin Klug, a spokesperson for the Arizona Department of Insurance, declined to comment for the story.
_The Washington Post_ reported that a judge denied a last-minute motion by PMI to reverse the Arizona Department of Insurance's October decision.
PMI said that $685 million in senior unsecured notes and about $51.5 million in junior unsecured notes became immediately due and payable as a result of the bankruptcy filing.
The company claimed in the statement that it had been in discussions to maximize the return for stakeholders by way of alternative solutions until state regulators intervened and ordered the company to cease writing new insurance policies.
PMI said that it had explored opportunities to raise capital from new investors to facilitate a national platform for mortgage insurance, and that these discussions had involved Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency