Following the announcement that it is pursuing a lawsuit against Fleming Intermediate Holdings (Fleming) over the sale of its reinsurance division, how have James River Group’s credit ratings been affected?
AM Best has announced that the ratings for the Bermuda-based group and its subsidiaries will remain unchanged at present following the legal move.
The lawsuit, which was filed in the Commercial Division of the Supreme Court of New York County, demands Fleming fulfill its commitment to acquire JRG Reinsurance Company Ltd. (JRG Re), as agreed upon in the Stock Purchase Agreement dated November 8, 2023. JRG Holdings is seeking an expedited court intervention to compel Fleming to proceed with the closure of the deal.
The legal battle stems from Fleming’s alleged refusal to complete the acquisition, which had been fully negotiated and executed in November, as per the statements in JRG Holdings’ complaint.
JRG Holdings has reiterated its commitment to the continued operation and support of JRG Re and its cedents for as long as it retains ownership.
Meanwhile, AM Best has indicated it will keep a vigilant eye on the development of the legal action and assess any potential implications it may have on the ratings of JRG Holdings and its subsidiaries.
James River and its affiliates are currently saddled with a negative outlook, with a financial strength rating (FSR) of A- (Excellent) and the long-term issuer credit ratings (Long-Term ICR) of “a-” (Excellent) for most of the subsidiaries.
Shortly after the suit’s filing, Fleming CEO Eric Haller responded, saying: “James River Group’s complaint misrepresents the facts to distract from its attempt to deliver JRG Reinsurance to Fleming in a condition that dramatically violated the parties’ agreement while refusing to cure its breaches of contract. Fleming has no obligation to close the transaction and will defend itself against this frivolous lawsuit.”
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