AICI filed an 8-k Acceptance Insurance Companies Inc. Litigation (United States Court of Federal Claims). On December 9, 2003, Acceptance Insurance Companies Inc. (the “Company”) filed a complaint against the United States of America. The complaint was filed in the United States Court of Federal Claims.
In November 2002, the Company and Rain and Hail L.L.C. (“Rain and Hail”) entered into a letter of intent under which Rain and Hail agreed to purchase certain insurance assets of American Growers Insurance Company (“American Growers”), a wholly owned subsidiary of the Company. Such assets were reinsured by, and subject to the oversight of, the Federal Crop Insurance Corporation (the “FCIC”). The transaction was subject to the approval of the Office of Risk Management, or the Risk Management Agency (the “RMA”). Ross J. Davidson, the Administrator of the RMA, advised that he would not approve the proposed sale of assets from the Company to Rain and Hail. The RMA subsequently enjoined American Growers from writing any new or renewal business. The Company alleges that the RMA’s actions rendered valueless the insurance business of American Growers.
The Company also alleges that in rejecting the proposed transaction between the Company and Rain and Hail, the RMA effected a taking of the Company’s property ( i.e. , the American Growers insurance assets) for public use without just compensation in violation of the Fifth Amendment to the United States Constitution. The Company seeks relief for its damages for the fair market value of the American Growers insurance assets in an amount of not less than $21.5 million, reasonable attorney’s fees and expert witness costs pursuant to 42 U.S.C. § 4654(c) with interest from the date of taking and such further relief the Court deems appropriate. The ultimate outcome of this action cannot be predicted at this time and, accordingly, the Company currently is unable to determine the potential effect of this litigation on its consolidated financial position, results of operations or cash flows.
This is not a reco to buy! Please do your DD!
