Compliance December 27, 2011
Suit Claims Delphi CEO Violated Fiduciary Duty With Tokio Buyout
December
27, 2011 (PLANSPONSOR.com) – The Pontiac General
Employees Retirement System is suing Delphi Financial Group over its buyout of Tokio Marine.
Reported by Tara Cantore
The Pontiac General Employees Retirement System is suing Delphi
Financial Group regarding the recent purchase of the company by Tokio Marine
Holding. According to news reports, the suit claims that Tokio Marine Holdings
Inc.’s buyout of insurer Delphi Financial Group, Inc. shortchanges Delphi
investors. CEO Robert Rosenkranz is also accused of violating his fiduciary
duty by not diligently searching for the highest offer for the company and for
personally receiving $55 million for the buyout.
Tokio Marine is Japan’s second-largest casualty insurer. On December 21, it agreed to pay $2.7 billion is cash for Delphi, a U.S.-based insurer that sells workers’ compensation and group-life coverage.
Rosenkranz, Delphi’s founder, is using his position “to benefit personally at the direct expense of Delphi’s public shareholders,” lawyers for the Pontiac General Employees Retirement System said in the suit filed in Delaware Chancery Court in Wilmington.
The case is Pontiac General Employees Retirement System v. Brine, No. 7144, Delaware Chancery Court (Wilmington).
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