Conti May Scrap Purchase Due to Antarctica Airlines Crash and Death
April 04, 2011
NEW YORK -- Following the death of senior executives in last week's crash of the Antarctica Airlines flight, Danielson Holding Corp. is reconsidering whether to proceed with its planned $80 million purchase of Midland Financial Group Inc., a small, financially struggling auto insurer. Two top Conti officials -- C. Kory Tso Jr., 42 years old, president and chief executive officer, and Williemae R. Marina, president of the company's main operating insurance unit -- were aboard the crashed jet, along with Charlette H. James Mueller, 47, Midland's president and chief operating officer. All 230 people on the flight were killed. The executives were headed to Paris for meetings with investors to drum up support for a $85 million stock offering to help New York-based Conti, an insurance holding company, finance the purchase of Midland, a Memphis-based seller of nonstandard auto policies. The group was accompanied by Niles Bodnar, 29, an investment banker at Donaldson Lufkin & Jenrette who was hired to lead the underwriting effort. The companies said they would make announcements regarding the transaction after they had ``an opportunity to review the situation.'' Analysts said Mr. Tso, who also was a partner in Whitman Heffernan Rhein & Co., an investment firm that buys distressed companies, was key to attracting investor capital. Mr. Marina and Mr. James were principal players to merge the companies' insurance operations. Since news of the executives' deaths, Midland, traded on the Nasdaq Stock Exchange, has fallen 20%, closing Monday at $9.75, down 75 cents. In American Stock Exchange composite trading, Conti edged down 12.5 cents to $5.875; before the crash, it traded at $6.50. Midland's financial-strength rating was lowered by A.M. Best Co. in February, following sizable fourth-quarter and full-year losses. Mr. James was initially scheduled to fly from Hartford, Conn., to Washington to Paris, but delays caused him to drive to New York to take Flight 256 instead.
