Fleming Insurance Holdings CEO Eric Haller has suggested that while the firm will continue to defend itself against the “meritless lawsuit” recently filed by James River Group Holdings, Fleming remains willing to acquire JRG Re “if James River cures its breaches of the agreement.”
If you recall, on the 8th of November 2023, James River announced its deal to sell JRG Re, its third-party casualty reinsurance business, to Fleming for an estimated $277 million.
However, in March of this year, James River filed a complaint in the New York County Supreme Court against Fleming in response to “the refusal of the firm to complete the fully negotiated transaction.”
“Just hours before 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,” James River said at the time.
James River also noted that it would take “all actions necessary” to protect its interests, enforce its rights, and compel Fleming to complete the transaction in accordance with its terms.
In a new development, just last week, Fleming’s attorneys filed an opposition to JRG’s motion for a preliminary injunction.
Fleming CEO Eric Haller, commented, “This week’s filing outlines in painstaking detail the steps James River Group took in its attempt to deliver JRG Reinsurance to Fleming in a condition that dramatically violated the parties’ agreement.
“While Fleming will continue to defend itself against this meritless lawsuit, we remain willing to acquire JRG Reinsurance if James River cures its breaches of the agreement.”
According to Haller, Fleming was excited to buy JRG Re on the terms of its agreement with James River and remains willing to do so. However, after the parties signed the Stock Purchase Agreement in November 2023, James River allegedly “sandbagged” Fleming with disclosures about unusually low reserving.
“In so doing, James River violated express prohibitions in the Agreement and failed to satisfy numerous closing conditions. James River’s remedy is simple and does not require the intervention of this Court: James River should cure its breaches to put the transaction back on a path to closing,” Haller explained.
He continued, “A preliminary injunction is not a tool to force specific performance of an M&A transaction, particularly when the seller has violated express conditions and closing conditions are unsatisfied… The relief the plaintiff seeks is not just drastic, it is unprecedented.”
