In re Tower Group International Ltd. Shareholder Litigation
The Firm represents Co-Lead Plaintiff Adar Enhanced Investment Fund, Ltd. and Adar Investment Fund, Ltd. (“ADAR”), and serves as Co-Lead Counsel in In re TowerGroup International Ltd. Shareholder Litigation, No. 13-cv-5852-AT (S.D.N.Y.),a securities fraud class action brought against Tower Group International Ltd. and its predecessor (collectively, “Tower”), certain of Tower’s officers (the “Officer Defendants”), ACP Re, Ltd. (“ACP Re”) as successor to Tower, and Tower’s independent auditor, PricewaterhouseCoopers LLP (“PwC”).
The consolidated amended complaint alleges, among other things, that Tower and the Officer Defendants materially misrepresented Tower’s financial health, including by understating its loss reserves and masking related internal control deficiencies. The complaint asserts these claims, under Sections 10(b), 20(a), 20(A) of the Securities Exchange Act of 1934 (the “Exchange Act”), on behalf of persons and entities who purchased or acquired Tower common stock from March 1, 2010 through December 17, 2013, inclusive (the “Class Period”).
The complaint further alleges claims against Tower under Sections 10(b) and 18 of the Exchange Act, and state law breach of contract, breach of express warranty, and negligent misrepresentation, on behalf of a sub-class of investors who acquired Canopius Holdings Bermuda Limited (“Canopius”) stock in the March 7, 2013 private placement performed in conjunction to the merger between Canopius and Tower Group, Inc. In particular, the complaint alleges that Tower breached the contracts and warranties it had with members of the private placement class, including, among other things, by improperly restricting members of this class from selling their “Registrable Shares” as the price of Tower securities declined. ADAR is the sole Lead Plaintiff for this subclass and the Firm is sole Lead Counsel for the subclass.
On August 13, 2015, a partial settlement of $20.5 million, resolving claims against the Tower Defendants, received preliminary approval by the Court. Following a final approval hearing held on November 23, 2015, the Court finally approved the partial settlement by Order that same day. Notably, the Firm was able to secure this substantial settlement relatively early in the litigation, prior to a decision on the defendants’ motion to dismiss, which had been fully briefed. Plaintiffs’ claims against PwC were dismissed.