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Re: Enterprising Investor post# 430

Monday, 09/13/2021 5:26:35 PM

Monday, September 13, 2021 5:26:35 PM

Post# of 467
Updates from the Fee and Expense Filing

The closing is expected later this month, as closing was conditioned upon:

(a) the approval of the Form A filing by the successful bidder with the Nebraska Department of Insurance, and (b) a final and non-appealable Order from the State Court, dismissing the Company, from its rehabilitation proceeding. The closing has taken longer than expected, in large part because DARAG North American Holding Company wants to merge the Company into another Texas insurance Company it is purchasing. This requires the approval of the Form A filing with the Texas Department of Insurance, which has made several requests for additional information related to the Texas Form A filing.

Under the Stock Purchase Agreement, the purchase price is adjusted based on the Company’s most recent Quarterly Statement filed with the Nebraska Department of Insurance. However, Applicant negotiated with DARAG North America Holding Company that the Company’s Quarterly Statement for the First Quarter of 2021 be used for purposes of calculating the purchase price adjustments, instead of the most current Quarterly Statement for the Second Quarter of 2021, which will result in significant additional purchase price proceeds to the Estate.

The efforts of the Trustee and Special Counsel also have led to very sizable distributions of $2,000,000 on July 9, 2019, $1,279,000 on June 1, 2020, and $1,328,000 on November 23, 2021 (s/b 2020), from the Company on its Surplus Note obligation to the Debtor’s estate, including as the result of the IAT Settlement and release of trust funds from Enstar.

Additionally, the Debtor anticipates significant additional value to the estate from distributions paid on Acceptance’s Proof of Claim of approximately $6,382,768 in the Reliance Insurance Company (In Liquidation) proceedings. The Reliance Insurance Company liquidator currently has estimated a 4.8% recovery on claims, which if true would equate to an approximate $300,000 recovery to the Estate. During this Third Application period, the Trustee and Applicant incurred substantial time and expense in an attempt to sell the Reliance Insurance Proof of Claims to Prime Shares to more quickly monetize this asset and potentially accelerate the closing of the Estate. Due to last minute issues and circumstances with the Reliance liquidation estate, Prime Shares withdrew their fully negotiated and documented offer to buy AIC’s Proof of Claims in the Reliance Insurance Company liquidation case after substantial efforts to sell the claim had been expended by the Estate.

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