A federal judge in the Southern District of New York has ruled against RPM Mortgage (now LendUS) in a failed merger case involving Bermuda-based reinsurer Partner Re.
Judge Engelmayer ruled on Wednesday, May 25, that RPM must pay $10.9 million in damages to Partner Re following the collapse of the firms’ deal.
RPM is also on the hook for interest.
Judge Engelmayer found that RPM had “wilfully breached its obligations” under the merger agreement.
Family-owned California-based mortgage bank RPM was meant to buy a major share in Entitle Direct Group, an Ohio-based title insurance company owned by Partner Re, but RPM failed to show up at the June 2017 closing, according to the judge’s opinion and order documents.
Partner Re brought the case on behalf of Entitle, naming RPM in the suit alongside CEO Robert Hirt, former RPM president Tracey Hirt, and the Robert Hirt and Tracey Najarian Hirt Living Trust.
RPM had levelled a counterclaim to the action.
The mortgage bank had sought to blame “purported breaches” by Entitle for the no show, while seeking to re-negotiate the deal on “materially more favourable terms”, the court documents said.
In a decision that labelled Robert Hirt “weasely”, Judge Engelmayer found in favour of Partner Re.
Robert Hirt, Tracey Hirt, and the Robert Hirt and Tracey Najarian Hurt Living Trust were all found to be not personally liable for a breach of contract under a theory of alter ego liability.
Partner Re was found not liable for breach of contract, as alleged by RPM.
Roche Freedman partner and lead attorney representing Partner Re, Amos Friedland said: “We are pleased that the court’s extremely thorough opinion has vindicated PartnerRe’s entitlement to the full damages it sought for RPM’s bad faith refusal to close under the parties’ merger agreement.”
Lend US has been approached for comment.