Press

As claims poured in from Hurricane Ida, executives of Lighthouse Insurance Co. scrambled to land an infusion of cash from investors, both to assuage concerns from regulators and in hopes of keeping the firm afloat. Now, the people who poured more than $60 million into the company just before it went belly-up are suing the firm and its executives, alleging a complex web of fraud involving a family trust, affiliated companies and a Florida bank. The allegations, made in a lawsuit filed by New York-based hedge-fund managers who claim Lighthouse bilked them, shed new light on the questionable business practices of one of the 12 insurers in Louisiana that failed after Ida.

Three investment firms connected to some of the best-known names on Wall Street have upped the ante in a legal dispute over now-insolvent Lighthouse Property Insurance Corp., based in Tampa. Fortinbras Enterprises, the managing partner of which is the well-known Ben Black; two Silver Rock funds, once affiliated with famous fund manager Michael Milken; and HT Investments last week filed a new lawsuit against former Lighthouse CEO Patrick White and his father, Lawrence White, alleging that the Whites misled the investment firms about the extent of Lighthouse financial trouble after Hurricane Ida hit Louisiana in 2021.

Investment group Fortinbras Enterprises has filed lawsuits in Florida and New York over claims that it was “wilfully defrauded” out of $65mn by defendants including Lighthouse Insurance CEO Patrick White, his father Lawrence White and their reinsurance broker TigerRisk, among others.

Today a private investment group announced legal filings against Lighthouse Insurance CEO Patrick White, his father Lawrence White, the Lighthouse Family Trust, Lawrence E. White Family Foundation, and insurance brokerage TigerRisk (a portfolio company of General Atlantic now doing business as Howden Re) in New York Supreme Court and Florida’s Ninth Judicial Circuit Court. Filed on behalf of an investment group including HT Investments and its advisor Fortinbras Enterprises, the suit states that the defendants willfully defrauded the plaintiffs out of $65 million.

"We will get through this," Jim Donelon said, pointing to nothing in particular, emphasizing each syllable with pauses, as if periods followed every word. "We. Will. Get. Through. This." The mood was heavy on June 16, 2022, as Donelon, Louisiana’s elected insurance commissioner for the past 16 years, weaved his way through another press conference about another failed insurance company. This time, Donelon tried to explain why 30,000 customers of Lighthouse Property Insurance Company were losing their policies in a matter of weeks. He endeavored to be a calming voice in the face of an unraveling homeowners’ crisis. "We will take care of our policyholders," Donelon said, claiming his Department of Insurance would help those impacted find a "place of comfort and protection."

A Florida lawsuit brought by private equity fund Fortinbras Enterprises and three others charges that Lighthouse Property Insurance Corp. executives concealed the extent of underwriting losses after Hurricane Ida, even as the insurer solicited millions in fresh capital. And part of the funds’ $65 million investment was used to pay off a $19 million loan from a Florida bank, but insurance company leaders failed to disclose an “insider relationship” with the bank. The deal left the bank fully repaid but left the hedge funds holding the bag when Lighthouse became insolvent, the lawsuit claims.