(Battle of Long Island by Domenick D’Andrea.)
Patriot National, Inc. (Fort Lauderdale, Fla.) a provider of technology and outsourcing solutions to the insurance industry, announced that it has agreed to be acquired by certain funds and accounts managed by each of Cerberus Business Finance, LLC (New York) and its affiliates and TCW Asset Management Company LLC (Los Angeles). The transaction will be effectuated under a plan of reorganization pursuant to the terms of a restructuring support agreement (RSA) between Patriot National and its lenders, Cerberus and TCW, under which Patriot and its direct and indirect U.S.-based subsidiaries will file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, according to a Patriot National statement.
Patriot expects to continue to operate its business in the ordinary course, does not expect the Chapter 11 filing to have a meaningful impact on its day-to-day operations. The Company intends to continue to provide uninterrupted service to all of its carrier customers in accordance with the terms of the current agreements. Patriot also anticipates that all commissions due to brokers who commit to continue their business relationships with the Company will be paid in the ordinary course of business or in full under the restructuring plan. Patriot expects the reorganization, which is subject to the completion of definitive documentation and regulatory approval, to be completed early in the second quarter of 2018.
Under the RSA announced Nov. 28, certain funds and accounts managed by Cerberus and TCW will convert a portion of their claims under the financing agreement in consideration for 100 percent of the new equity to be issued in Patriot National and the subsidiaries under the Plan. The Patriot statement states that existing equity interests in the company and the subsidiaries will be extinguished, and Patriot National will no longer have any affiliation with its founder and former CEO Steven Mariano, who resigned earlier this year.
Recommitting to Customers
“Today marks a significant milestone for Patriot National as we look to reduce our debt, significantly improve our liquidity and financial condition, and improve our ability to service our loyal customers,” comments John Rearer, CEO, Patriot National. “In taking the measured, strategic step to recapitalize through a Chapter 11 process, we are partnering with strong financial and operational partners who can provide us with the resources and expertise to move forward. We are recommitting ourselves to our customers and will ensure that they continue to receive the same high level of service they have come to expect under all current agreements.”