Fleming Acquires James River’s Casualty Reinsurance Business, Ending Legal Dispute

James River Group Holdings Ltd. announced that Fleming Intermediate Holdings has completed the $277 million acquisition of James River’s casualty reinsurance business – after a period of legal wrangling that had threatened to derail the deal.

The transaction, which was first announced in November 2023, hit a roadblock when Fleming resisted completion, indicating that James River had misrepresented the level of its casualty reserving for JRG Reinsurance Co.

On March 11, James River filed a lawsuit to force Fleming to honor its contractual obligation to complete the acquisition in accordance with the terms of original stock purchase agreement (SPA).

Fleming responded on March 26 with its own legal action, asking the court to deny James River’s preliminary injunction. The legal filing said that James River had “sandbagged Fleming with disclosures about unusually low reserving.”

“This is not a case of buyer’s remorse. It is a bait and switch,” the Fleming court filing said.

In a press statement issued on March 28, Fleming’s CEO Eric Haller described James River’s lawsuit as “meritless.”

However, the court did not agree with Fleming. On April 8, the Supreme Court, New York County, Commercial Division, ordered Fleming to complete its acquisition of JRG Re on or prior to April 16, 2024. Although a Fleming media representative at the time told Insurance Journal the company planned to appeal, the deal ultimately was completed on April 16.

“We are pleased to have successfully completed our sale of JRG Re to Fleming in accordance with the Stock Purchase Agreement that the parties negotiated together and executed on Nov. 8, 2023,” commented Frank D’Orazio, James River’s chief executive officer, in a media statement.

Fleming did not have a comment about the completion of its acquisition.

“James River will continue to focus its resources on its core U.S. insurance businesses where we have meaningful scale, including our E&S and fronting businesses,” D’Orazio added.

Bermuda-based James River Group Holdings owns and operates a group of specialty insurance and reinsurance companies in three specialty property/casualty insurance and reinsurance segments: excess and surplus lines, specialty admitted insurance and casualty reinsurance.

Fleming is a portfolio company of private equity sponsor Altamont Capital Partners, which is based in Palo Alto, California.

Topics
Mergers & Acquisitions
Reinsurance
Casualty