Arnold & Porter LLP Advises Client, PMI on Asset Sale to Arch Capital Group Ltd.
New York, Jan. 31, 2014 - Arnold & Porter LLP announced that the firm advised client, PMI Mortgage Insurance Co., in rehabilitation, in the sale of its mortgage insurance operating platform to Arch U.S. MI, the U.S. subsidiary of Arch Capital Group Ltd. [Nasdaq: ACGL] in a deal that closed yesterday.
The deal was also part of Arch's purchase of CMG Mortgage Insurance Company, of which PMI was fifty percent owner. PMI is under the receivership of the Arizona Department of Insurance.
The transaction was first announced in February of 2013. At closing, Arch's U.S.-based subsidiaries paid aggregate consideration of $253 million under all transaction documents. Additional amounts may be paid based on the actual results of CMG MI's pre-closing portfolio over an agreed upon period. PMI will recognize further financial benefits through cost savings and efficiencies that result from the transaction.
In addition, Arch entered into a services agreement with PMI to provide certain necessary services to administer the run-off of PMI's legacy mortgage insurance business at the direction of PMI. Further, PMI and an affiliate of Arch's entered into a quota share reinsurance agreement pursuant to which such affiliate, as the reinsurer, agreed to provide 100% quota share indemnity reinsurance to PMI for all certificates of insurance that were issued by PMI between and including January 1, 2009 and December 31, 2011 that are not in default as of an agreed upon effective date.
The cross-practice, cross-office team advising PMI on the sale was headed by partner Robert C. Azarow (NY) and included partners David S. Berg (NY), Teresa L. Johnson (San Francisco), Bryce R. Giddens (San Francisco), Michael L. Bernstein (NY), lead relationship partner for PMI, Douglas A. Winthrop (San Francisco), associate Eleni Zanias (NY), and other attorneys from the Corporate, Tax, Bankruptcy, Executive Compensation, Antitrust, Real Estate, Litigation, Employment and Intellectual Property Groups.
Arnold & Porter has had a long-standing relationship with PMI and has represented the company on a variety of matters for many years prior to, and since, PMI's receivership.
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