FedNat Holding Company will seek Chapter 11 bankruptcy protections and explore "strategic alternatives" including reorganization or asset sales, after it became the sixth Florida property/casualty to fail in 2022 when it was
placed into receivership earlier this fall. The company has $6.5 million in cash on hand to support daily operations during the Chapter 11 process, which, it said in a statement, would allow it to operate uninterrupted including cover pay and benefits for employees and services for customers. FedNat said it would file normal "first day" motions allowing it to maintain normal operations and it intends to continue employees' pay and primary benefits, along with certain customer programs, without disruption, the statement said. The voluntary petitions have been filed in the United States Bankruptcy Court for the Southern District of Florida, the company said. In October, FedNat Holding Co. said it would voluntarily delist its common stock from the Nasdaq Stock Market because the board of directors doubts it could regain compliance with listing rules. FedNat said its board opted for the voluntary delisting due to the "likely inability" of regaining compliance and significant costs associated with the effort (BestWire, Oct. 26, 2022). Despite efforts to stay afloat by unloading thousands of policies and obtaining cash infusions, FedNat Insurance Co. was put into receivership as the company could not keep up the pace of revenues to claims (BestWire, Sept. 26, 2022). The company hired GGG Partners, LLC as financial advisers to manage the restructuring process and Nelson Mullins Riley & Scarborough LLP as legal advisers, the statement said. Katie S. Goodman, Managing Partner of GGG, was brought on to serve as chief restructuring officer and in November FedNat's board of directors appointed Richard B. Gaudet, GGG's Head of Finance and Accounting, to serve as interim chief financial officer. FedNat Insurance Group was the 14th-largest writer of homeowners multiperil insurance in Florida last year, with a 2.71% market share, based on direct premiums written, according to BestLink.