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HFW advises Penn National on Tawa Plc demerger

1 April 2014

International law firm Holman Fenwick Willan (HFW) recently advised Pennsylvania National Mutual Casualty Insurance Company (Penn National), a property-casualty mutual insurance company, incorporated and headquartered in Harrisburg, Pennsylvania, in relation to the proposed reorganisation and reduction of capital of AIM-traded Tawa Plc (Tawa) and demerger of its risk carrier business.

The reorganisation involves a transfer of Tawa’s risk carrier business to Tawa Associates Ltd, a wholly-owned subsidiary of Tawa, and a reduction of capital to create sufficient distributable reserves to implement the demerger of that subsidiary to Tawa shareholders.

Penn National is a contingent creditor of Tawa pursuant to a guarantee Tawa executed in favour of Penn National. The guarantee relates to a reinsurance contract between Penn National and QX Reinsurance Company Ltd (a Tawa subsidiary).

HFW advised Penn National on the Companies Act 2006 and UK Court process concerning Tawa’s reduction of capital and how best to protect Penn National’s rights with respect to the reduction of capital and demerger as a contingent creditor of Tawa’s. As a result of presenting Penn National’s concerns to Tawa in the lead up to the final court hearing on 26 March 2014, HFW was able to have Penn National’s concerns successfully resolved and reasonably reduce the potential impact of the reduction of capital and demerger for certain other creditors of Tawa.

HFW’s team was led by Corporate Partner James Lewis with the assistance of Simon Congdon (Litigation Partner), Alison Proctor (Litigation Associate) and Laura Jones (Corporate Associate).

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