Hallmark Financial Services, Inc. (“Hallmark” or the “Company”) today announced that it has successfully completed its previously announced prearranged financial restructuring and has emerged from Chapter 11. Through this process, Hallmark significantly reduced debt at the holding company level, strengthened its balance sheet, and increased its financial flexibility, positioning the Company for long-term success.
The restructuring was completed with the support of Hildene Capital Management, LLC (“HCM”) and certain HCM affiliates (collectively, “Hildene”), an alternative asset manager with more than $18 billion in assets under management, whose clients held a majority of Hallmark’s debt obligations prior to the transaction. As a result of the transaction, accounts managed by Hildene have become the majority owners of Hallmark, providing the Company with supportive ownership and access to Hildene’s deep financial expertise as it enters its next phase.
“Today marks an important milestone for Hallmark and the beginning of an exciting new chapter for our Company,” said Chris Kenney, President and Chief Executive Officer of Hallmark. “With a significantly strengthened financial foundation and the support of Hildene, Hallmark is a well-capitalized company that is even better positioned to build on the strengths of our insurance company subsidiaries. Throughout this process, our focus has remained on supporting our insurance subsidiaries and the agents, policyholders, and business partners who depend on them. We are grateful for their continued trust and support, as well as the dedication of our employees, and look forward to building on this momentum.”
“Hallmark has a strong foundation and meaningful opportunities ahead,” said Brett Jefferson, President and Co-Chief Investment Officer of Hildene. “The completion of this restructuring provides the Company with a more sustainable capital structure and greater flexibility to support its insurance businesses. We look forward to working closely with Chris and the Hallmark team as they continue to focus on the strength and stability of those operations.”
Advisors
Hallmark Financial Services was advised by Gray Reed as restructuring counsel, Olshan Frome Wolosky LLP as corporate counsel, Oliver Wyman, LLC as financial advisor with William K. Snyder, a partner at Oliver Wyman, LLC, as Chief Restructuring Officer, Raymond James as investment banker, and Prosek Partners as strategic communications advisor.
Hildene was advised by Ducera Partners LLC as financial advisor, Fox Rothschild LLP and Wollmuth Maher & Deutsch LLP as legal counsel, and Maynard Nexsen PC as insurance regulatory counsel.
About Hallmark
Hallmark Financial Services, Inc. is a diversified property and casualty insurance company offering commercial and personal insurance solutions to businesses and individuals in specialty and niche markets on an admitted basis. The Company is licensed and eligible to write admitted and non-admitted business in 47 and 44 states, respectively, and its managing general agencies are licensed to produce business in 44 states. Hallmark was founded in 1987 and is headquartered in Dallas, Texas.
About Hildene Capital Management
Hildene is an alternative asset manager focused on credit investing through structured credit and asset-based credit strategies. Hildene manages more than $18 billion for a broad range of clients across hedge fund, drawdown, SMA, insurance, and securitization vehicles, with a focus on maximizing returns through event-driven strategies. The firm’s investment process extends above and beyond traditional market valuation processes and utilizes rigorous analysis and research to identify mispriced assets which may be overlooked or misunderstood by other market participants. Hildene was founded in 2008 and has offices in Durham, North Carolina, and Stamford, Connecticut. For additional information, please visit: www.hildenecap.com.
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