The chief executive of Los Angeles-based health care liability insurer SCPIE Holdings Inc. has been accused by an investor in the company of making "false and misleading statements" about the firm's upcoming merger.
On Tuesday, the insurer announced it had agreed to be acquired by The Doctors Company, a physician-owned medical malpractice carrier, for approximately $281 million.
Investor Joseph Stilwell, who resigned from SCPIE's board Tuesday but still holds 8.97 percent of the insurer's shares, made his charges concerning CEO Donald Zuk in a letter Thursday to SCPIE Chairman Dr. Mitchell S. Karlan.
The letter was contained in the acquisition filing made to the Securities and Exchange Commission.
Dr. Karlan in a response letter said the allegations were "factually incorrect."
According to Mr. Stilwell, Mr. Zuk made misleading comments in a conference call about the proposed merger. His letter said "I believe it is clear there were superior offers" higher than $28 a share, despite Mr. Zuk's comments in a conference call Wednesday that there were no offers in excess of $28.
He asked the chairman to "clarify this matter immediately" and issue a press release correcting Mr. Zuk's comments.
Mr. Stilwell, who manages the investment firm Stilwell Value Partners III LP, resigned from SCPIE's board over differences with management and the proposed merger with Doctors.
Dr. Karlan in his letter wrote in part that "Mr. Zuk took pains to put the description of the stock bid in the correct context-namely the value of the stock consideration offered was to be based on a 20 day moving average to be determined at a future date, and so, by its nature was indeterminable at the time of the meeting of the Board of Directors."
He added that the board had considered various factors in considering which bid was superior and, "These factors will be summarized in SCPIE's proxy statement for the special meeting of SCPIE's stockholders to vote on the merger."
This article updated Oct.22, 9:56 a.m.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.