James River sues Fleming to enforce reinsurance sale

Bermuda-based James River Group (JRP) has sued Altamont Capital Partners-backed Fleming Intermediate Holdings to force it to complete its acquisition of JRG Reinsurance, which was announced in November 2023.

Under the deal, Fleming was to purchase its third-party casualty reinsurer for $277 million, consisting of a $139 million pre-closing dividend and a $138 million cash payment. Now, James River has commenced litigation, filing a complaint with the New York County Supreme Court’s Commercial Division for specific performance – requiring Fleming to close the transaction. 

A statement from the company said the action was in response “to the refusal of Fleming to complete the fully negotiated transaction.”

“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 company said.

“Fleming’s self-serving complaints are flatly contradicted by the parties’ signed agreement,” the statement goes on to say, and states that 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”.

Frank D’Orazio, James River's chief executive officer, said: “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.”

Fleming is a portfolio company of Altamont Capital Partners, a private equity firm with over $4 billion of capital under management and significant experience investing in the insurance sector. Its parent company is registered in Bermuda.

Eric Haller, CEO of Fleming, said in a statement to Intelligent Insurer: “James River Group’s complaint misrepresents the facts to distract from its attempt to deliver JRG Reinsurance to Fleming in a condition that dramatically violated the parties’ agreement while refusing to cure its breaches of contract. Fleming has no obligation to close the transaction and will defend itself against this frivolous lawsuit.”

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