(Reuters) – White Mountains Insurance Group Ltd has filed a federal lawsuit against peer Allstate Corp over the 2011 sale of the online auto insurer Esurance, alleging that Allstate inappropriately lowered the final purchase price.
The suit, dated Sept. 17 and made public on Tuesday, relates to a purchase price adjustment clause that was a part of the May 2011 transaction. The roughly $1 billion sale to Allstate closed in early October of last year.
Under the terms of the clause, Allstate was to make an estimated payment at closing related to Esurance's tangible book value, with an adjustment after the fact to reconcile the actual book value to the estimate.
But according to White Mountains, Allstate missed by five months a firm deadline to have a post-closing balance sheet audited. In the meantime, Esurance spent $5.2 million to settle unrelated litigation.
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