Today’s issue of WorkCompRecap features news coming out of the mergers & acquisitions space as Majestic Capital’s previously announced merger agreement with Bayside Capital Partners has been terminated by Bayside. In its termination notice, Bayside cited a material deterioration in Majestic Capital’s capital surplus, an inability to secure regulatory approval for the merger, and a failure to satisfy the closing condition with respect to termination of Majestic Capital’s lease for office space in New York.
The merger’s failure is likely to result in a downgrade of Majestic Insurance Company’s “B++” financial strength rating and a conservation proceeding by the California Department of Insurance. Majestic Insurance Company, Majestic’s wholly-owned insurance subsidiary, has entered into a non-binding letter of intent with AmTrust Financial Services, Inc. by which Majestic Insurance Co. would sell AmTrust its renewal rights and AmTrust would assume Majestic Insurance Company’s loss reserves and in-force insurance business.
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