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).