FedNat enters Chapter 11 in Florida court, interim CEO resigns
The company has around $6.5 million in cash on hand, which it reported will be enough to maintain day-to-day operations during the bankruptcy.
FedNat Holding Co., a regional insurance holding company, along with several of its wholly owned subsidiaries have voluntarily entered Chapter 11 in the United States Bankruptcy Court for the Southern District of Florida. The subsidiaries included in the filing are FedNat Underwriters, Inc., ClaimCor, LLC, Century Risk Insurance Services, Inc., and Insure-Link, Inc., according to company filings with the Securities and Exchange Commission.
The company reported it is considering whether to reorganize the business or sell off its assets. As it stands, the company has approximately $6.5 million in cash on hand, which it reported will be enough to maintain day-to-day operations, including “timely payment of employee wages and benefits and continued servicing of customers,” while the bankruptcy process plays out.
In May, FedNat Insurance Co., along with Maison Insurance Co. and Monarch National Insurance Co., announced it was canceling some 68,200 policies, with 45 days’ notice to policyholders, as part of an agreement with the Florida Office of Insurance Regulations. The three insurers are part of the same holding company. The agreement, known as a consent order, said the early cancellation of policies is an “extraordinary statutory remedy reserved to address insurers which are or may be in hazardous financial condition without the cancellation of some or all of its policies.”
This news comes the same week Florida legislators kicked off a special session to address the state’s turbulent property insurance market. Proposals being considered would take steps to reduce litigation costs, move policies out of the state-backed Citizens Property Insurance Corp., offer additional reinsurance to insurers and try to speed up claims.
Interim CEO steps down
Additionally, David K. Patterson stepped down as interim CEO on Dec. 12, 2022, but is remaining on the FedNat’s board, according to the SEC filing. Patterson assumed the interim CEO position in October 2019.
Katie S. Goodman of GGG Partners, LLC, will now serve as the company’s principal executive officer. Goodman, who was appointed chief restructuring officer of FedNat in September 2022, brings more than 25 years of experience in restructurings and turnarounds, finance, mergers and acquisitions, and operations, according to the company.
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