James River files lawsuit to enforce reinsurance sale | Insurance business America
SPA has led to problems for the group, including a significant loss in fourth quarter results
reinsurance
By Kenneth Araullo
Bermuda-based James River Group has filed a lawsuit against Fleming Intermediate Holdings, a portfolio company of Altamont Capital Partners, seeking to force Fleming to comply with the terms of a stock purchase agreement (SPA) relating to its acquisition of JRG Reinsurance Company Ltd. (JRG) to hold Re).
The lawsuit, filed in the Commercial Division of the New York County Supreme Court, focuses on Fleming’s alleged failure to complete the acquisition of JRG Re, a deal that is close to closing once all necessary regulatory approvals are received.
James River’s legal filings indicate that Fleming backed out of the agreement on the eve of the expected closing. The company is accused of not participating in the final conference call and of seeking significant last-minute changes to the terms of the transaction.
James River maintains that it has complied with all contractual obligations required to complete the deal, which was first announced on November 8, 2023. The insurer is now seeking urgent court intervention to enforce the SPA, thereby requiring Fleming to proceed with the takeover as originally agreed.
The group’s previously announced sale of JRG Re has caused a lot of trouble for James River. In December, a law firm opened an investigation into the holding company for allegedly lacking effective controls over reinsurance.
Earlier this year, James River and its subsidiaries – including JRG Re – were hit by AM Best’s ratings downgrade after the company identified significant weaknesses in internal controls over financial reporting and plans to sell JRG Re. This downgrade was followed by a net loss in the fourth quarter 2023 financial results, which revealed a notable loss of $80.4 million related to the sale.
In light of this new lawsuit, James River CEO Frank D’Orazio stated that the company is committed to vigorously defending its interests and those of its shareholders.
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2024-03-11 15:24:11
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