Law firm Ryan & Maniskas has filed a class action lawsuit against officers and directors of Meadowbrook Insurance Group (MIG) for violation of the Securities Exchange Act of 1934.
The lawsuit, filed in the US District Court for the Southern District of New York, alleges that defendants failed to disclose material adverse facts about MIG’s business, operations, and prospects between 30 July 2012 and 8 August 2013.
In addition, defendants also made misleading statements like MIG’s financial stability was severely impaired, goodwill was materially inflated, capital position was not strong enough.
Furthermore, defendants also failed to disclose the company’s breach of its financial covenants applicable to its credit facilities, lack of required internal and financial controls; and materially false statements.
On 14 August 2013, MIG said it would take non-cash impairment of goodwill of $115.4m for the three months period ended on June 30, 2013. The impairment removed nearly the company’s entire goodwill on its balance sheet.
Meadowbrook Insurance Group operates as a commercial insurance underwriter and insurance administration services company in the US.