diff --git a/server/src/com/cloud/network/rules/RulesManagerImpl.java b/server/src/com/cloud/network/rules/RulesManagerImpl.java
index 2383366850c..6c1e27a5e64 100755
--- a/server/src/com/cloud/network/rules/RulesManagerImpl.java
+++ b/server/src/com/cloud/network/rules/RulesManagerImpl.java
@@ -406,7 +406,8 @@ public class RulesManagerImpl implements RulesManager, RulesService, Manager {
 
         // Verify input parameters
         boolean performedIpAssoc = false;
-        boolean result = false;
+        boolean isOneToOneNat = ipAddress.isOneToOneNat();
+        Long associatedWithVmId = ipAddress.getAssociatedWithVmId();
         try {
             Network network = _networkMgr.getNetwork(networkId);
             if (network == null) {
@@ -470,28 +471,25 @@ public class RulesManagerImpl implements RulesManager, RulesService, Manager {
                 // enable static nat on the backend
                 s_logger.trace("Enabling static nat for ip address " + ipAddress + " and vm id=" + vmId + " on the backend");
                 if (applyStaticNatForIp(ipId, false, caller, false)) {
-                    result = true;
+                    return true;
                 } else {
                     s_logger.warn("Failed to enable static nat rule for ip address " + ipId + " on the backend");
+                    ipAddress.setOneToOneNat(isOneToOneNat);
+                    ipAddress.setAssociatedWithVmId(associatedWithVmId);
+                    _ipAddressDao.update(ipAddress.getId(), ipAddress);
                 }
             } else {
                 s_logger.warn("Failed to update ip address " + ipAddress + " in the DB as a part of enableStaticNat");
                 
             }
         } finally {
-            if (!result) {
-                ipAddress.setOneToOneNat(false);
-                ipAddress.setAssociatedWithVmId(null);
-                _ipAddressDao.update(ipAddress.getId(), ipAddress);  
-                
-                if (performedIpAssoc) {
-                    //if the rule is the last one for the ip address assigned to VPC, unassign it from the network
-                    IpAddress ip = _ipAddressDao.findById(ipAddress.getId());
-                    _vpcMgr.unassignIPFromVpcNetwork(ip.getId(), networkId);
-                }
+            if (performedIpAssoc) {
+                //if the rule is the last one for the ip address assigned to VPC, unassign it from the network
+                IpAddress ip = _ipAddressDao.findById(ipAddress.getId());
+                _vpcMgr.unassignIPFromVpcNetwork(ip.getId(), networkId);
             }
         }
-        return result;
+        return false;
     }
 
     protected void isIpReadyForStaticNat(long vmId, IPAddressVO ipAddress, Account caller, long callerUserId)