James River Commences Litigation Against Fleming Intermediate Holdings to Enforce Stock Purchase Agreement
March 11 2024 - 9:00AM
James River Group Holdings, Ltd. (“James River” or the “Company”)
(NASDAQ: JRVR) announced that it has filed a complaint in the
Supreme Court, New York County, Commercial Division against Fleming
Intermediate Holdings (“Fleming”), a portfolio company of private
equity sponsor Altamont Capital Partners. The action seeks specific
performance of Fleming’s obligation to complete the acquisition of
JRG Reinsurance Company Ltd. (“JRG Re”) in accordance with the
Stock Purchase Agreement (the “SPA”) between the parties as of
November 8, 2023. James River will seek expedited relief from the
Court to require Fleming to close the transaction.
James River brings this action in response to
the refusal of Fleming to complete the fully negotiated transaction
that it executed in November. James River has taken all of the
contractually required steps to effect a closing, including the
receipt of all regulatory approvals. However, just hours prior to
the contractually required closing, Fleming claimed that it had no
obligation to close and did not attend the scheduled closing call.
Fleming subsequently demanded material economic changes to the
agreed-upon transaction terms.
The lawsuit makes clear that Fleming’s
self-serving complaints are flatly contradicted by the parties’
signed agreement. James River will take all actions necessary to
protect its interests, enforce James River’s rights under the SPA
and compel Fleming to complete the transaction in accordance with
its terms. As long as James River continues to own JRG Re, James
River will continue to operate and support JRG Re and its cedents
as it has throughout its ownership. The Company has prepared JRG Re
and its financials for sale according to the terms of the SPA.
Frank D’Orazio, the Company’s Chief Executive
Officer, commented, “James River is taking immediate action to
enforce its rights under the previously agreed upon transaction
with Fleming and ensure that Fleming fulfills its obligations to
the Company. We remain confident in the strength of JRG Re and its
team, and we believe that the steps we are taking are in the best
interests of James River and its shareholders.”
About James River Group Holdings,
Ltd.James River Group Holdings, Ltd. is a Bermuda-based
insurance holding company that owns and operates a group of
specialty insurance companies. The Company operates in two
specialty property-casualty insurance segments: Excess and Surplus
Lines and Specialty Admitted Insurance. Each of the Company’s
regulated U.S. insurance subsidiaries are rated “A-” (Excellent) by
A.M. Best Company. Visit James River Group Holdings, Ltd. on the
web at www.jrvrgroup.com.
James River Investor Contact:Brett
ShirreffsSVP, Finance, Investments and Investor Relations(919)
980-0524Investors@jrvrgroup.com
James River Media Contact:Adam Pollack /
Kaitlin Kikalo / Michael Reilly Joele Frank, Wilkinson Brimmer
Katcher+1-212-355-4449
Forward-Looking StatementsThis
press release contains forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. In
some cases, such forward-looking statements may be identified by
terms such as believe, expect, seek, may, will, should, intend,
project, anticipate, plan, estimate, guidance or similar words.
Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Although it is not possible to identify
all of these risks and uncertainties, they include, among others,
the following: the inherent uncertainty of litigation and the
potential failure to obtain specific performance of the buyer’s
obligation to complete the acquisition of JRG Re announced on
November 8, 2023; the timing of the, or the potential failure to,
close the sale by the Company of the common shares of JRG Re
announced on November 8, 2023; the inherent uncertainty of
estimating reserves and the possibility that incurred losses may be
greater than our loss and loss adjustment expense reserves;
inaccurate estimates and judgments in our risk management may
expose us to greater risks than intended; downgrades in the
financial strength rating or outlook of our regulated insurance
subsidiaries impacting our ability to attract and retain insurance
business that our subsidiaries write, our competitive position, and
our financial condition; potential uncertainty regarding the
outcome of our exploration of strategic alternatives, and the
impacts that it may have on our business; the potential loss of key
members of our management team or key employees and our ability to
attract and retain personnel; adverse economic factors resulting in
the sale of fewer policies than expected or an increase in the
frequency or severity of claims, or both; the impact of a
persistent high inflationary environment on our reserves, the
values of our investments and investment returns, and our
compensation expenses; exposure to credit risk, interest rate risk
and other market risk in our investment portfolio; reliance on a
select group of brokers and agents for a significant portion of our
business and the impact of our potential failure to maintain such
relationships; reliance on a select group of customers for a
significant portion of our business and the impact of our potential
failure to maintain, or decision to terminate, such relationships;
our ability to obtain reinsurance coverage at prices and on terms
that allow us to transfer risk, adequately protect our company
against financial loss and that supports our growth plans; losses
resulting from reinsurance counterparties failing to pay us on
reinsurance claims, insurance companies with whom we have a
fronting arrangement failing to pay us for claims, or a former
customer with whom we have an indemnification arrangement failing
to perform its reimbursement obligations, and our potential
inability to demand or maintain adequate collateral to mitigate
such risks; inadequacy of premiums we charge to compensate us for
our losses incurred; changes in laws or government regulation,
including tax or insurance law and regulations; changes in U.S. tax
laws (including associated regulations) and the interpretation of
certain provisions applicable to insurance/reinsurance businesses
with U.S. and non-U.S. operations, which may be retroactive and
could have a significant effect on us including, among other
things, by potentially increasing our tax rate, as well as on our
shareholders; in the event we do not qualify for the insurance
company exception to the passive foreign investment company
(“PFIC”) rules and are therefore considered a PFIC, there could be
material adverse tax consequences to an investor that is subject to
U.S. federal income taxation; the Company or any of its foreign
subsidiaries becoming subject to U.S. federal income taxation; a
failure of any of the loss limitations or exclusions we utilize to
shield us from unanticipated financial losses or legal exposures,
or other liabilities; losses from catastrophic events, such as
natural disasters and terrorist acts, which substantially exceed
our expectations and/or exceed the amount of reinsurance we have
purchased to protect us from such events; potential effects on our
business of emerging claim and coverage issues; the potential
impact of internal or external fraud, operational errors, systems
malfunctions or cyber security incidents; our ability to manage our
growth effectively; failure to maintain effective internal controls
in accordance with the Sarbanes-Oxley Act of 2002, as amended
(“Sarbanes-Oxley”); changes in our financial condition, regulations
or other factors that may restrict our subsidiaries; ability to pay
us dividends; and an adverse result in any litigation or legal
proceedings we are or may become subject to. Additional information
about these risks and uncertainties, as well as others that may
cause actual results to differ materially from those in the
forward-looking statements, is contained in our filings with the
U.S. Securities and Exchange Commission ("SEC"), including our most
recently filed Annual Report on Form 10-K. These forward-looking
statements speak only as of the date of this release and the
Company does not undertake any obligation to update or revise any
forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
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