Picture: aismallard, This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.
Bermuda-based James River Group has initiated a lawsuit against Fleming Intermediate Holdings, a portfolio entity of Altamont Capital Partners, seeking to compel Fleming to adhere to conditions of a stock purchase agreement (SPA) concerning the acquisition of JRG Reinsurance Company Ltd. (JRG Re).
The legal action, filed in the Commercial Division of the Supreme Court of New York County, centers on Fleming’s alleged failure to complete the acquisition of JRG Re, a deal poised for closure upon securing all requisite regulatory nods.
James River’s legal filing recounts that Fleming, on the eve of the anticipated closing, withdrew from the agreement. The company is accused of not participating in the final closing call and seeking substantial alterations to the terms of the transaction at the last minute.
James River asserts that it has fulfilled all contractual obligations necessary for the deal’s conclusion, first publicized on November 8, 2023. The insurer now seeks the court’s urgent intervention to enforce the SPA, thereby obligating Fleming to proceed with the acquisition as originally agreed.
The group’s earlier announced sale of JRG Re has resulted in a host of trouble for James River. In December, a law firm initiated investigations against the holding firm over what it alleges to be a lack of effective controls over reinsurance.
Earlier this year, James River and its subsidiaries – including JRG Re – were hit by downgraded ratings from AM Best following what was perceived to be material weakness in its internal control over financial reporting and the plans to sell off JRG Re. This downgrade was followed by a net loss realized in its Q4 2023 financial results, which revealed a notable $80.4 million loss related to the sale.
In light of this new suit, Frank D’Orazio, CEO of James River, stated the company’s commitment to defending its interests and those of its shareholders vigorously.
What are your thoughts on this story? Please feel free to share your comments below.
