Tower Group faces shareholder lawsuit
Tower Group underwrites re/insurance in Bermuda, the US and London markets, and holds an 11 percent stake in re/insurer Canopius.
“The Complaint alleges that during the Class Period defendants issued false and misleading statements or failed to disclose that: (1) the Company failed to properly estimate its loss reserve provisions as required by Generally Accepted Accounting Principles, and (2) the Company failed to properly allocate its goodwill and certain deferred tax assets.” stated Glancy, Binkow & Goldberg, one of the law firms retained in the action.
The action was filed in the US District Court for the Southern District of New York.
Another firm involved, Pomerantz Grossman Hufford Dahlstrom & Gross, stated: “On August 7, 2013, after the close of market, the Company disclosed that it is postponing the release of its financial results for the second quarter of 2013.
“The Company stated that its management concluded that additional time is needed to review matters relating to the estimate of its loss reserves and, primarily due to the integration of the Canopius Bermuda merger, its allocation of goodwill and certain tax accounts.
“On this news, Tower securities declined $5.21 per share or nearly 25 percent, to close at $16.39 per share on August 8, 2013. Listed on the Nasdaq, they closed at just under $14 yesterday.”
On August 13, rating agency AM Best Co put the ratings of the subsidiaries of Tower Group under review with negative outlook.
Investors of Tower Group International, or its predecessor company Tower Group during the class period have until October 21, 2013 to file a motion to be appointed as lead plaintiffs in the lawsuit.