This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Majestic Capital Announces Termination Of The Merger Agreement With Bayside Capital Partners; Non-Binding Letter Of Intent With AmTrust For Renewal Rights Of Majestic Insurance Company

Majestic Capital, Ltd. (Majestic Capital) (Nasdaq: MAJC) today announced that Bayside Capital Partners LLC (Bayside) has terminated the previously announced merger agreement with Majestic Capital. In its termination notice, Bayside cited a material deterioration in Majestic Capital’s capital surplus, an inability to secure regulatory approval for the merger, and a failure to satisfy the closing condition with respect to termination of Majestic Capital’s lease for office space in Poughkeepsie, New York on terms acceptable to Bayside. As a result of Bayside’s termination of the merger agreement, Majestic Capital’s previously scheduled Special General Meeting of Shareholders to vote on the merger agreement scheduled for March 28, 2011 has been cancelled.

The failure to complete the merger with Bayside is expected to result in a downgrade of Majestic Insurance Company’s “B++” financial strength rating and a conservation proceeding by the California Department of Insurance. As a result, Majestic Capital and its subsidiaries expect to seek protection under applicable United States and Bermuda bankruptcy and other similar laws for the protection of creditors.

Majestic Insurance Company, Majestic Capital’s wholly-owned insurance subsidiary, has entered into a non-binding letter of intent with AmTrust Financial Services, Inc. (AmTrust) (Nasdaq: AFSI) by which Majestic Insurance Company would sell AmTrust its renewal rights and AmTrust would assume Majestic Insurance Company’s loss reserves and in-force insurance business through a loss portfolio transfer and 100% quota share reinsurance agreement. The transactions contemplated by the letter of intent are subject to negotiation and execution of definitive agreements and approval by the California Department of Insurance. Majestic Insurance Company has granted AmTrust an exclusivity period until the earlier of June 20, 2011 and the commencement of a conservation proceeding. The proposed transactions by Majestic Insurance Company with AmTrust are not expected to yield any amounts that would be available for distribution to shareholders of Majestic Capital.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs