Fleming rebuffs James River’s complaint, vows to contest ‘frivolous’ lawsuit

Altamont Capital Partners-backed Fleming Intermediate Holdings is preparing to mount a robust defence against what it considers a “frivolous” lawsuit initiated by James River over the delay in closing the $277 million casualty reinsurance deal for JRG Re. Fleming believes JRG Re is in a condition that “dramatically violated the parties’ agreement”.

In a response to James River’s legal action demanding Fleming to proceed with the acquisition of JRG Reinsurance, Fleming CEO Eric Haller stated: “Fleming has no obligation to close the transaction and will defend itself against this frivolous lawsuit.”

Haller disputed James River’s portrayal of the situation, alleging the company’s failure to address contractual breaches. “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,” he argued.

Under the deal unveiled in November 2023, Fleming was slated to acquire its third-party casualty reinsurer for $277 million. However, earlier this week, James River initiated legal proceedings, filing a complaint with the New York County Supreme Court’s Commercial Division for specific performance – compelling Fleming to conclude the transaction.

According to James River, Fleming’s refusal to proceed with the fully negotiated transaction prompted this action. The company maintains that it has fulfilled all contractual requirements for the closing, including obtaining regulatory approvals. 

“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,” a statement from the company read. 

“Fleming’s self-serving complaints are flatly contradicted by the parties’ signed agreement,” James River said, noting that the company is ready to 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 CEO, declared: “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 experience investing in the insurance sector. Its parent company is registered in Bermuda.

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