Key Developments For Triad Guaranty Inc.
Triad Guaranty Inc. (TGIC.O) (Nasdaq)
Triad Guaranty Inc. To Sell Mortgage Insurance Operating Platform to Essent Guaranty
Triad Guaranty Inc. announced that it has reached a definitive agreement to sell its information technology and operating platform to Essent Guaranty, Inc., a new mortgage insurer founded to provide private capital to America's housing finance system. Under the terms of the asset purchase agreement, Essent will acquire all of Triad's proprietary mortgage insurance software and substantially all of the supporting hardware, as well as certain other assets, in exchange for up to $30 million in cash and the assumption by Essent of certain software contractual obligations. Approximately $15 million of the consideration is fixed and up to an additional $15 million is contingent on Essent writing a certain minimum amount of insurance in future years. Triad will retain the obligation for all risks insured under its existing insurance contracts and will continue to pursue the voluntary run-off of its existing in-force book of business. As part of a services agreement between the two companies, Essent will provide ongoing information systems maintenance and services, customer service and policy administration support to Triad after the closing. Triad will continue to directly manage loss mitigation and claim activity during its run-off and will retain its personnel in the loss management, quality assurance and corporate areas to perform these functions. The transaction is expected to close in the fourth calendar quarter of 2009.
Dyer & Berens LLP Files Class Action Lawsuit Against Triad Guaranty Inc. On Behalf of Investors
Dyer & Berens LLP announced that it has filed a class action lawsuit in the United States District Court for the Middle District of North Carolina on behalf of certain investors of Triad Guaranty Inc. who purchased or otherwise acquired the Company's common stock between October 26, 2006 and November 10, 2008, inclusive (the Class Period). The complaint charges Triad and certain of its senior officers with violations of the federal securities laws. The complaint alleges that, during the Class Period, defendants made false and misleading statements to the market about the Company's business and financial condition. For example, defendants failed to disclose that; the Company was not adequately accounting for its loss reserves in violation of Generally Accepted Accounting Principles, causing its financial results to be materially misstated; the Company failed to engage in proper underwriting practices for its book of business related to insurance written in 2006 and 2007, including the insurance related to its Alt-A and pay-option adjustable rate mortgage products; the Company had far greater exposure to anticipated losses and defaults related to its book of business related to insurance written in 2006 and 2007, including its Alt-A and pay-option ARM portfolios, than it had previously disclosed; the Company lacked effective internal controls to detect fraud and misrepresentations in the underwriting process.
Triad Guaranty Inc. Announces Filing of Purported Class Action Lawsuit
Triad Guaranty Inc. announced that on January 28, 2009 a purported federal securities class action lawsuit was filed in the U.S. District Court for the Middle District of North Carolina against the Company and certain of its current and former officers. The plaintiff purports to represent a class of persons who purchased or otherwise acquired the common stock of the Company between October 26, 2006 and November 10, 2008. The plaintiff contends that during this time period the defendants knowingly or recklessly made false statements about the Company, or failed to disclose adverse facts about the Company known to the defendants, resulting in purchases of the Company's common stock by the plaintiff and members of the class at prices that were artificially inflated.
Izard Nobel LLP Announces Class Action Lawsuit Against Triad Guaranty Inc.
The law firm of Izard Nobel LLP announced that a lawsuit seeking class action status has been filed in the United States District Court for the Middle District of North Carolina on behalf of those who purchased the common stock of Triad Guaranty, Inc. between October 26, 2006 and November 10, 2008, inclusive (the Class Period). The Complaint charges that the Company and certain of its officers and directors violated federal securities laws by issuing materially false statements concerning the Company's business and financial results. The Complaint alleges that defendants failed to disclose the following: (i) the Company was not adequately accounting for loss reserves in violation of GAAP, causing its financial results to be materially misstated; (ii) the Company failed to engage in proper underwriting practices for its insurance written in 2006 and 2007, including the insurance related to its Alt-A and pay-option ARM products; and (iii) Triad had far greater exposure to anticipated losses and defaults related to insurance written in 2006 and 2007 than it had disclosed.
Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Triad Guaranty Inc.
Coughlin Stoia Geller Rudman & Robbins LLP announced that a class action has been commenced in the United States District Court for the Middle District of North Carolina on behalf of purchasers of Triad Guaranty Inc. (Triad) common stock during the period between October 26, 2006 and November 10, 2008 (the Class Period). The complaint charges Triad and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Triad, through its subsidiary, Triad Guaranty Insurance Corporation, provides private mortgage insurance products to residential mortgage lenders and investors in the United States. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company`s business and financial results. As a result of defendants` false statements, Triad stock traded at artificially inflated prices during the Class Period, reaching its Class Period high of $58.45 per share in January 2007. However, beginning in late August 2007 and continuing throughout 2008, Triad began to acknowledge serious issues surrounding its exposure to anticipated losses and defaults related to its book of business for its Alt-A and pay-option adjustable rate mortgage ("ARM") products written in 2006 and 2007 due to a failure to engage in proper underwriting practices, resulting in a decline in Triad`s stock price.
