NEW YORK, NY--(Marketwired - Oct 11, 2013) - Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against Meadowbrook Insurance Group, Inc. ("Meadowbrook" or the "Company") (NYSE: MIG) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 13 CV 5748, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of Meadowbrook between July 30, 2012 and August 8, 2013 both dates inclusive (the "Class Period"). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Meadowbrook securities during the Class Period, you have until October 14, 2013 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Meadowbrook was founded in 1955 as Meadowbrook Insurance Agency and was subsequently incorporated in Michigan in 1965. Meadowbrook is a holding company organized as a Michigan corporation in 1985. The Company's executive offices are located at 26255 American Drive, Southfield, Michigan 48034. The Company purports to be a specialty niche focused commercial insurance underwriter and insurance administration services.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company's financial stability was severely impaired; (2) the Company's reported goodwill was materially inflated; (3) the Company's capital position was not strong enough to support its ongoing insurance operations in a sustainable fashion; (4) the Company was in breach of its financial covenants applicable to its credit facilities; (5) the Company lacked adequate internal and financial controls, including controls over outstanding claims, asset impairment charges and maintenance of an appropriate capital position; and (6) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On October 19, 2012, A.M. Best Company ("A.M. Best") announced that it had put the financial strength rating and issuer credit rating of Meadowbrook's Insurance Company Subsidiaries, the Company's main operating subsidiary, under review with negative implications. On this news, the Company's shares fell $1.61 per share or over 20% to close on October 19, 2012 at $6.18 per share.
Then, on August 2, 2013, A.M. Best Company downgraded the Company's financial strength rating from "A-" (Excellent) to "B++" (Good) with a "stable" outlook. Following such downgrade, the Company promptly undertook an analysis to quantify asset impairment charges arising from such downgrade. On this news, Meadowbrook securities declined $0.80 per share or over 10%, to close at $6.74 per share on August 5, 2013.
On August 9, 2013, Meadowbrook announced that it was unable, without unreasonable effort or expense, to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 within the prescribed time period. On this news, Meadowbrook securities declined a further $0.19 per share or over 2%, to close at $6.60 per share on August 12, 2013.
Finally, on August 14, 2013, the Company announced that it would take a non-cash impairment of goodwill of $115.4 million in the three months ended June 30, 2013. The impairment wiped out nearly all of the Company's goodwill on its balance sheet, and caused the Company to violate "financial covenants" applicable to the certain credit facilities. On this news the Company's shares fell $0.20 per share to $6.36 per share on August 15, 2013, a decline of 3.05%.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.