Fleming Intermediate Holdings filed a lawsuit towards James River Group Holdings Ltd., alleging it had been defrauded throughout its $300 million acquisition of JRG Reinsurance Co.
As soon as the deal agreement was signed in November 2023, Fleming stated, “James River instantly started depriving JRG Re’s management of crucial details about their very own firm and looting JRG Re’s property to make sure that Fleming wouldn’t obtain the total worth of the corporate it bargained for,” stated the lawsuit filed on July 15 within the US District Courtroom for the Southern District of New York.
Fleming stated it’s bringing the authorized motion “for securities fraud, common-law fraud, and breach of contract to get better the big damages attributable to James River’s egregious wrongdoing in reference to this $300 million transaction.”
“On account of James River’s misconduct, at acquisition JRG Re was borderline bancrupt and working in violation of Bermuda legislation,” the lawsuit continued. “That was not what Fleming moderately anticipated in consummating the sale or what the events had agreed to. However upon closing, this grew to become Fleming’s drawback fairly than James River’s.”
The lawsuit additionally personally names as defendants James River’s Chief Govt Officer Frank D’orazio and the corporate’s Chief Monetary Officer Sarah Doran, “in mild of their central roles in James River’s monetary misconduct.”
James River Feedback
A James River consultant supplied a remark about Flemings’ authorized motion: “James River believes the claims made by Fleming, like their arguments in New York State court docket proved to be, are completely with out advantage and James River intends to defend itself towards them vigorously.”
Authorized Wrangling
Fleming tried to again out of the deal in late April indicating that James River had misrepresented the extent of its casualty reserving for JRG Re. In March, James River filed a suit to get Fleming to abide by its contractual obligation to finish the acquisition. Fleming responded on the time by saying it had no obligation to shut the transaction, asserting that James River had tried to ship JRG Re to Fleming in a situation that “dramatically violated the events’ settlement whereas refusing to remedy its breaches of contract.”
Finally, the deal was completed in mid-April after Fleming was ordered by the court docket to shut the transaction and “Fleming had no alternative to substantively problem that ruling on attraction,” stated Fleming in its July lawsuit.
After the sale, Fleming stated it launched an investigation into what it had been bought. “That investigation revealed that James River had breached quite a few covenants contained within the events’ inventory buy settlement, which additionally contained myriad false and deceptive materials misstatements upon which Fleming had moderately relied,” the lawsuit continued.
“James River’s conduct has injured Fleming in some ways as a result of the model of JRG Re that Fleming was pressured to amass will not be the model of JRG Re that Fleming had agreed to amass,” in keeping with Fleming, which is in search of compensatory, consequential and punitive damages in addition to prices and bills.
The case No. 24-cv-5335 is Fleming Intermediate Holdings LLC, Plaintiff, v. James River Group Holdings, Ltd., Frank D’Orazio and Sarah Doran, Defendants.
Bermuda-based James River Group Holdings owns and operates a bunch of specialty insurance coverage and reinsurance corporations in three specialty property/casualty insurance coverage and reinsurance segments: extra and surplus traces, specialty admitted insurance coverage and casualty reinsurance.
Fleming is a portfolio firm of personal fairness sponsor Altamont Capital Companions, which is predicated in Palo Alto, California.
Associated:
Subjects
Lawsuits
Mergers & Acquisitions
Fraud
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