FSN Capital is paid full € 50 million insurance limit for damages related to its acquisition of Gram Equipment from Procuritas
Copenhagen/London, 1 April 2019 – Northern European private equity firm FSN Capital and Liberty GTS today announced that FSN Capital has received payment of the full insurance limit of €50 million under a warranty and indemnity liability insurance policy issued by a consortium of 12 insurance underwriters led by a Liberty Mutual affiliate and underwritten by Liberty GTS for losses incurred in connection with FSN Capital’s acquisition of Gram Equipment from Swedish-based Procuritas in January 2018.
FSN Capital filed its insurance claim in June 2018, shortly after its acquisition of Gram Equipment earlier the same year, claiming the seller had breached several of the warranties in the share purchase agreement numerous times, including warranties on the seller’s duty of loyal disclosure and accounting material by providing false and misleading information in the sales process.
Following extensive legal investigations, the insurance consortium has acknowledged policy cover under the warranty & indemnity insurance policy and agreed to pay the full limit.
“Obviously we are pleased that the underwriters, after detailed investigation of our claim that we were given misleading and false information by the seller in our due diligence process, have acknowledged cover and paid the full insurance amount,” said partner at FSN Capital, Thomas Broe-Andersen.
“Liberty GTS and the entire consortium of underwriters have acted very professionally, and it is rewarding to see the W&I insurance product actually works when needed and justified,” Thomas Broe-Andersen added.
Note to the editor – Background
Shortly after FSN Capital acquired Gram Equipment from Procuritas, and in connection with preparation of the 2017 annual accounts, the independent statutory auditors found accounting irregularities while auditing the annual accounts. This resulted in a significant reduction of Gram Equipment’s reported EBITDA and to FSN Capital filing damages claims for breach of seller’s warranties in the share purchase agreement. FSN Capital has subsequently injected and secured additional funds to Gram Equipment to secure its continued operations.