News for 'TGIC' - (Triad Guaranty speeds toward potential bankruptcy)
Jan 29, 2013 (Winston-Salem Journal - McClatchy-Tribune Information Services
via COMTEX) -- The pending end of business at Triad Guaranty Inc. appears to be
accelerating, as the company announced today three significant devel! opments that
include the potential of entering bankruptcy.
Triad Guaranty, based in Winston-Salem, is a mortgage-insurance company that
protects residential-mortgage lenders, such as banks, credit unions and mortgage
brokers, from losses if homeowners default on their loans.
In June 2008 -- six months after the financial crisis began -- Triad said it
stopped writing new mortgage insurance policies and began conducting "an orderly
transition of its business to runoff." That means the company's revenue coming
from existing policies will eventually expire.
At that time, Triad officials said they expected the company to exist until at
least 2015 to 2017. But since the company entered runoff status, at least 206 of
its 250 local jobs have been eliminated.
The company announced that as a byproduct of being taken over by its regulator,
the Illinois Insurance Department, it has no significant operating activities
and limited ! remaining cash and other assets on hand.
Although the company said it would explore its strategic options, it
"anticipates seeking to dissolve the corporation either through Chapter 11,
Chapter 7 or otherwise."
The second development is that its principal business office has moved,
effective today, to Birmingham, Ala., which is where William Ratliff III, its
chairman, president and chief executive, is based. Ratliff could not be reached
for immediate comment on how that affects Triad's remaining workforce.
The third development is that it has told the Securities and Exchange Commission
of its decision to deregister its common stock. Triad can take that step because
it has fewer than 300 registered shareholders at the start of fiscal year 2013.
The stock is expected to remain quoted on the Over-the-Counter Pink tier
exchange if trading interest remains.
"The company's board of directors believes that the anticipated accou! nting,
legal and administrative cost savings from deregistration substantially outweigh
any benefits of continued registration and are in the best interests of both the
company and the holders of its common stock," the company said.
"Following deregistration, the company does not expect to publish periodic
financial information or furnish such information to its stockholders except as
may be required by applicable laws." It also is changing its website to
www.triadguarantyinc.com, effective Friday.
Today's developments follow up on the Jan. 4 announcement that three top
executives, including president and chief executive Kenneth Jones, had been
fired as part of regulators taking over the company.
The companies were placed into rehabilitation under the Illinois Insurance code
Dec. 11. The department has jurisdiction over the companies because they are
domiciled there.
Paul Miller, acting special deputy receiver in the ! department's Office of
Special Receiver in Chicago, said Dec. 28 the agency terminated the three
executives as part of preserving the company's assets and protecting its policy
holders and creditors.
"Our goal is to run things as smoothly as possible," Miller said. "Policyholders
are still paying premiums. We are doing business as usual -- processing claims
and making payments."
On Nov. 14, Triad reported a $33.3 million loss in the third quarter, compared
with a $31.3 million loss in the second quarter and a $37.5 million lost a year
ago. Its deficit in assets was at $802.8 million on Sept. 30 with $771.4 million
on June 30.
rcraver@wsjournal.com
(336) 727-7376
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Richard Craver
Copyright (C) 2013, Winston-Salem J! ournal, N.C.
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