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Patriot National filing for bankruptcy, will be acquired

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Patriot National filing for bankruptcy, will be acquired

Patriot National Inc. has agreed to be acquired by funds and accounts managed by Cerberus Business Finance LLC and its affiliates and TCW Asset Management Co. LLC.

The transaction will be part of a prepacked reorganization plan under the terms of a restructuring support agreement the company entered with its lenders, Cerberus and TCW to recapitalize itself. Under the agreement, the company and its direct and indirect U.S.-based subsidiaries will file for relief under Chapter 11 bankruptcy. The company expects the reorganization to be completed early in the second quarter of 2018.

Under the agreement, existing equity interests will be extinguished and the lenders will receive 100% of the equity interests in the reorganized company. The company will no longer have any affiliation with its founder and former CEO, Steven Mariano, who resigned earlier this year.

All commissions due to brokers who maintain their business relationships with the company will be paid under the plan. Patriot National plans to provide uninterrupted service to its carrier customers in accordance with their current agreements during the process, it said.

The agreement calls for the creation of a liquidating trust and potential causes of action, including claims against professionals, officers and directors, will be transferred to it.

Cerberus Business is the collateral agent and administrative agent and certain funds and accounts managed by each of Cerberus Business and its affiliates and TCW Asset Management Company are the lenders.