Patriot National, Inc.

Robbins Arroyo LLP: Patriot National, Inc. (PN) Misled Shareholders According to a Recently Filed Class Action

Robbins Arroyo LLP announces that a class action complaint was filed against Patriot National, Inc. (NYSE: PN) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of Patriot National securities between August 15, 2016 and March 3, 2017, for alleged violations of the Securities Exchange Act of 1934 by Patriot National’s officers and directors. Patriot National, together with its subsidiaries, provides technology-enabled outsourcing solutions within the workers compensation marketplace for insurance carriers, local governments, reinsurance captives, and other employers in the United States.

Patriot National Accused of Enabling Biased Special Committee

According to the complaint, on August 15, 2016, Patriot National confirmed that the special committee of its board of directors was working with Ebix, Inc. to possibly combine the two businesses. Then, on November 8, 2016, Patriot National announced that it was rejecting a $475 million proposal from Ebix. In a subsequent conference call with analysts, Steven M. Mariano, Chief Executive Officer of Patriot National, stated that the Ebix transaction was rejected because the company had a better offer from someone else. However, the complaint alleges that Patriot National officials failed to disclose that the special committee was beholden to Mariano, was operating for the benefit of Mariano, did not independently assess the merits of the Ebix transaction, and was not exploring strategic alternatives to maximize shareholder value.

On March 3, 2017, Patriot National disclosed that it entered into an agreement with Guarantee Insurance Group (“GIG”) and Mariano, majority owner of both Patriot National and GIG, regarding the service agreements between the company and GIG’s wholly-owned subsidiary Guarantee Insurance Company. Under the agreement, the company paid GIG $30 million. The company further disclosed that “[a]s further material inducements for the company’s payment,” GIG and Mariano agreed to a series of corporate and financial covenants, including that the company would not enter into any transaction with an affiliate of Mariano without the prior approval of a majority of independent directors. On this news, Patriot National’s stock fell $0.72 per share, or 16.4%, to close at $3.67 per share on March 6, 2017, and continued to decline in the following days, closing at $3.01 per share on March 8, 2017.

Patriot National Shareholders Have Legal Options

Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.

 

Shareholder Information

Items marked with an asterisk (*) are required information.

First Name * Last Name *
Phone *
E-mail * Confirm: E-mail *
Number of Shares Owned:
Comments:

Please Note: Neither the submission to nor the receipt of information by Robbins Arroyo LLP or one of its attorneys through this website constitutes an agreement by our firm to represent the individual and does not create an attorney-client relationship. Please do not send confidential or sensitive information through this website. This information should be communicated through a direct contact with an individual at the firm.

* I have read the disclaimer information
+=

    Send This Post