Scpie (NYSE:SKP)
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SCPIE Holdings Inc. (NYSE:SKP) announced today that the
Delaware Department of Insurance has notified the Stilwell Group that
the holding of proxies with respect to more than 10% of the Company's
common stock by the Stilwell Group requires the Department's approval,
which the Stilwell Group has not attempted to obtain. While SCPIE is
studying the implications of the Department's decision, it understands
this determination to mean that, if the Stilwell Group does not obtain
such approval prior to the Company's upcoming annual meeting (or
otherwise overturn the Department's decision), some or all of the
proxies it may obtain pursuant to its pending solicitation may not be
authorized to be voted at the annual meeting. SCPIE further
understands that the Department's approval process involves a minimum
of one month (and typically involves two to three months) of
consideration, suggesting that in SCPIE's view it is highly unlikely
that the Stilwell Group could possibly secure such approval by SCPIE's
scheduled June 22, 2006, stockholders' meeting date.
A copy of the full text of the Department's letter follows:
-0-
*T
Department of Insurance
Matthew Denn (Seal of Delaware 841 Silver Lake Blvd.
Insurance Commissioner Insurance Dover, DE 19904-2465
Commissioner) (302) 674-7300
(302) 739-5280 fax
June 2, 2006
Kenneth B. Schnoll
Sonnenschein Nath & Rosenthal
685 Market Street, 6th Floor
San Francisco, CA 94105-4207
Re: Disclaimer of Control - American Healthcare Indemnity Company
Dear Mr. Schnoll:
The Department has reviewed your request for a Disclaimer of Control
regarding American Healthcare Indemnity Company. In the Disclaimer
Stilwell Value Partners III, L.P., Stilwell Value LLC, Joseph
Stilwell, Spencer L. Schneider, Gregory Noonan (Jointly referred to
herein as "Stilwell") states that they are seeking to elect
individuals to fill three positions to the Board of Directors of
SCPIE. The Disclaimer also states that, it will, for a limited time
and purpose, hold proxies to vote more than 10% of the outstanding
shares of SCPIE in favor of its three nominees for election to the
twelve-person Board.
Delaware code 5001 (3) defines control as follows:
(3) "Control." The term "control" (including the terms
"controlling", "controlled by" and "under common control
with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management
and policies of a person, whether through the ownership
of voting securities, by contract other than a
commercial contract for goods or non-management
services, or otherwise, unless the power is the result
of' an official position with or corporate office held
by the person. Control shall be presumed to exist if any
person, directly or indirectly, owns, controls, holds
with the power to vote, or holds proxies representing,
10 percent or more of the voting securities of any other
person. This presumption may be rebutted by a showing
made in the manner provided by section 5004(k) of this
title that control does not exist in fact. The
Commissioner may determine, after furnishing all persons
in interest notice and opportunity to be heard and
making specific findings of fact to support such
determination, that control exists in fact,
notwithstanding the absence of a presumption to that
effect.
Since Stilwell states it will hold proxies to vote of more than 10% of
the outstanding shares of SCPIE, the Department interprets this as
Stilwell having control per the above definition. Therefore the
Department believes that Stilwell must file a Form A as required per
section 5003 of the Delaware Code. If you have any questions or
concerns please feel free to contact me at (302) 674-7330.
Sincerely,
/s/
Darryl Reese, CFE, CIE, CFE
Director of Company Regulation
Cc: Glenn C. Kenton, Richards, Layton & Finger
*T
About SCPIE Holdings
SCPIE Holdings Inc. is a leading provider of healthcare liability
insurance for physicians, oral and maxillofacial surgeons, and other
healthcare providers, as well as medical groups and healthcare
facilities. Since the company was founded in 1976, it has carved out a
significant niche in the insurance industry by providing innovative
products and services specifically for the healthcare community.
Important Additional Information Filed with the SEC
On May 8, 2006, SCPIE filed a definitive proxy statement with the
SEC and mailed it to SCPIE's stockholders. WE URGE INVESTORS TO READ
THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT SCPIE HAS
FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Security holders are able to obtain a free copy of the proxy statement
and other related documents filed by SCPIE at the SEC's website at
www.sec.gov. SCPIE's proxy statement and other related documents may
also be obtained from SCPIE free of charge by contacting SCPIE's
Communications Department at (310) 551-5942.
LISTING OF PERSONS WHO MAY BE DEEMED "PARTICIPANTS" IN THE
SOLICITATION AND CERTAIN INFORMATION CONCERNING SUCH PERSONS IS SET
FORTH IN THE DEFINITIVE PROXY STATEMENT FILED WITH THE SEC ON MAY 8,
2006, WHICH MAY BE OBTAINED THROUGH THE WEB SITE MAINTAINED BY THE SEC
AT www.sec.gov. SINCE SUCH DATE, WILLIAM A. RENERT, M.D. SOLD 1,895
SHARES OF SCPIE'S COMMON STOCK ON MAY 12, 2006.
Forward-Looking Statements
In addition to historical information, this news release contains
forward-looking statements that are based upon the SCPIE's estimates
and expectations concerning future events and are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward-looking statements.
Forward-looking statements include statements herein regarding SCPIE's
upcoming annual meeting of stockholders. In light of the significant
uncertainties inherent in the forward-looking information herein, the
inclusion of such information should not be regarded as a
representation by SCPIE or any other person that SCPIE's objectives or
plans will be realized.