Mergers & Acquisitions

The Risk Management Division of Body-Borneman Associates would like to offer our services to help you counsel your clients on the handling of unpredictable exposures and unmanageable liabilities.  These risks can negatively impact their ability to consummate business transactions.  However, through risk transfer, your clients are free to capitalize on economic opportunities they might otherwise have to walk away from.   During the last few years, new non-traditional insurance products have become available to help business managers mitigate a myriad of risks.  Some of the balance sheet problems that can be solved include:

• Securities Litigation
• Intellectual Property Disputes
• Environmental Liabilities
• Exotic Buyouts & Loss Portfolio Transfers
• Unfunded Benefits Liabilities
• Reps & Warranties Liabilities
• Tax Liabilities
• Product, General & Employment Liabilities
• ERISA Liabilities
• Medical or Hospital Professional Liabilities
• Long-term Risk Financing With Potential for Sharing in Benefits of Favorable Loss Experience

Terms That Can Be Tailored Into Your Program:

We can help you to assess your client’s situation and tailor solutions to address their immediate and/or long-term risk mitigation needs—from 3-month to 30-year terms, from $500,000 to $1 billion in limits, in the U.S. or internationally.   The programs can be structured on a guaranteed cost basis or with your client participating through a self insured retention.  Finite risk programs can also be designed which combine strategic risk assumption and financing over time, thus securing broader coverage, over a longer term, with the potential for reducing insurance costs by sharing in the benefits of favorable loss experience.

One of the leading insurers underwriting these programs is AIG.  They hold a triple A rating, have assets in excess of $306 billion and shareholders’ equity of $39.6 billion.  They operate in 130 countries, with extensive expertise in insurance/risk transfer, financial products, asset management and capital markets.  In short, they offer risk management capabilities, risk-bearing capacity, risk warehousing expertise and unbeatable financial strength.. 

Examples of  Problems Which Can Be Solved Using Financial Risk Coverage:

• Capping of accrued liabilities of a captive in a runoff mode
• Transfer of litigation and future liabilities of a pending employment practices class action lawsuit
• Transfer of litigation in an alleged patent infringement lawsuit holding up marketing of a new product
• Capping of litigation exposure associated with a stockholder lawsuit
• Capping of cost overruns and new pollution liabilities for contaminated properties holding up sale
  of a company
• Protection against risk of contingent tax liability for disallowed expense deductions
• When a current transaction may jeopardize the treatment of a prior favorable tax liability
• Substitution of insurance for a tax indemnification obligation required by a buyer
• Indemnification above an escrow to protect against potential loses resulting from a breach of representations & warranties
• Stabilization of future expenses
• Potential acceleration of certain tax benefits
• Increased debt capacity
• Transfer of accrued liabilities, including worker’s compensation, product liability, medical & hospital professional liability, etc.
• Increased value of an entity for sale or in an IPO
• Long-term liability coverage for discontinued products sold prior to the merger or acquisition date

If you are currently working on a transaction with liabilities you would like to transfer, please give us a call at 800-326-5290.  Ask for Frank Wagner, CPCU, ARM or Dave Guzik, REM, CHMM.