Hallmark Completes Millers Acquisitions

Hallmark Financial Services Inc., based in Dallas, announced it has closed the acquisition of certain subsidiaries and other assets from Millers American Group Inc.

Hallmark acquired the outstanding stock of Millers General Agency Inc., a Texas managing general agency, as well as certain contracts and fixed assets, from Millers Insurance Company, an indirect subsidiary of Millers. Hallmark simultaneously acquired directly from Millers all of the outstanding stock of two inactive subsidiaries, Financial and Actuarial Resources Inc. and Effective Litigation Management Inc.

The acquisition of Millers General Agency expands Hallmark’s product offerings to include commercial lines insurance in addition to non-standard automobile insurance. As a result of the transaction, Hallmark will expand its presence beyond Texas to the states of Idaho, New Mexico, Oregon and Washington. Additionally, the newly acquired Hallmark subsidiaries have employed all Millers Insurance Company personnel and entered into agreements to provide fee-based claims and financial administrative services to Millers Insurance Company.

These acquisitions follow Hallmark’s recent purchase of a note in default by Millers which is secured by the capital stock of Millers Insurance Company, a Texas-based commercial lines insurance carrier, and Phoenix Indemnity Insurance Company (Phoenix), an Arizona-based non-standard automobile insurance carrier. Hallmark previously announced that, in lieu of immediate foreclosure, it has negotiated with Millers to accept the stock of Phoenix in partial satisfaction of the outstanding balance of the Millers note. This proposed exchange is contingent on execution of a mutually acceptable definitive agreement and regulatory approval. If consummated, the proposed transaction would result in Phoenix becoming a wholly-owned subsidiary of Hallmark. The stock of Millers Insurance Company would continue to be held by Hallmark as collateral for the remaining balance of the Millers note while the parties evaluate the recapitalization or reorganization of Millers Insurance Company.