Ambac Financial Group (AMBC) may benefit from something in Bank of America (BAC) 10-K filing  posted Tuesday evening regarding its plans to pay for representation and warranty breaches.

Bank of America’s 10-K stated that damages claimed by Ambac are more than $1 billion and include “the amount of payments for current and future claims it has paid or claims it will be obligated to pay under the policies, increasing over time as it pays claims under relevant policies, plus unspecified punitive damages."

The exact amount that Ambac could recover is not disclosed. The $1 billion amount mentioned in the 10-K includes punitive damages.

“We have recorded a liability of $13.3 billion for obligations under representations and warranties exposures (which includes exposures related to MI rescission notices). We have also established an estimated range of possible loss of up to $4 billion over our recorded liability. Although we have not recorded any representations and warranties liability for certain potential private-label securitization and whole-loan exposures where we have little to no claim experience, these exposures are included in the estimated range of possible loss. Reserves and estimated range of possible loss for certain potential monoline representations and warranties exposures are considered in our litigation reserve and estimated range of possible loss,” the filing reads.

Assured Guaranty and MBIA won court rulings against Bank of America recently while Ambac was involved in bankruptcy proceedings. Ambac filed similar R&W lawsuits to recover losses from Bank of America/Countrywide, JPMorgan Chase (JPM), Credit Suisse, Nomura, and First Franklin.

While there is no guarantee, the two rulings suggest it is more likely that Bank of America will settle rather than risk another such lawsuit.