Alea Group Holdings (Bermuda) Ltd, part of the Catalina insurance group, has filed for Chapter 11 bankruptcy protection in Texas alongside two of its American affiliates.

The Chapter 11 cases, made public by OffshoreAlert, involve three connected holding companies: Bermudian-based Alea Group Holdings, its wholly owned subsidiary Fin Alea LLC and Fin Alea’s subsidiary, Alea Holdings United States Co. The latter is the holding company for the group’s regulated American insurers, which are not themselves in bankruptcy.

Catalina Holdings (Bermuda) Ltd, the parent of the Alea group, is also not one of the companies seeking bankruptcy protection.

The debtors said they intend to use the court-supervised process to restructure their liabilities and sell two insurance subsidiaries, Alea North America Insurance Co and National American Insurance Co of California.

Proceeds from the proposed sales are expected to provide the main source of recovery for creditors. The transactions are subject to court and regulatory approval and are expected to close during the third quarter of this year.

Catalina was approached for comment on whether any similar proceedings had been or would be filed in Bermuda, whether the Bermuda Monetary Authority is aware of the filing and how the filing might affect operations on the island.

Court documents said the holding companies had about $280 million in long-term financial obligations. These comprised $120 million of “trust-preferred” or hybrid debt-like securities held by investors and nearly $160 million in outstanding principal under a loan secured against company assets. The lender, Catalina Finance LLP, is an indirect subsidiary of Catalina Holdings.

The filing followed an unsuccessful attempt to restructure the securities outside bankruptcy. The tender offer required participation from every holder.

Under the proposed Chapter 11 plan, holders of the securities would instead share a $20 million cash pool.

Peter Kravitz, the debtors’ chief restructuring officer, said in a court declaration that the “initial position was adversarial” between the group and Hildene Capital Management, the investment firm holding most of the trust-preferred securities. The parties spent nearly 18 months negotiating.

The Alea group entered run-off after hurricane losses in 2004 and 2005 led to rating downgrades. Catalina acquired the business from Fortress Investment Group in 2014.

A third insurance subsidiary, Sparta Insurance Co, is expected to remain in run-off and is not being sold under the proposed restructuring.

The Chapter 11 cases are being jointly administered in the US Bankruptcy Court for the Southern District of Texas. No corresponding filing could be identified in publicly available Bermuda court records.