A Florida judge this week effectively dismissed a lawsuit brought by private equity firms who charged that Lighthouse Property Insurance executives misled investors about the extent of losses from Hurricane Ida in 2021.
By entering into a 2021 note purchase agreement, the investment firms “had released any claims they might otherwise have had, and are therefore barred from bringing Counts I through III of the complaint,” Orange County Circuit Judge Chad Alvaro wrote in his Aug. 31 order on the defendants’ request for summary judgment. “And, without an underlying cause of action supporting Count IV, a constructive trust is unavailable as a matter of law.”
The firms, including Fortinbras Enterprises, founded by Ben Black, sued former Lighthouse CEO Patrick White, of Orlando, and his father, Lawrence White. The suit charged that the Whites concealed the losses the insurer was hit with after Ida struck Louisiana. At the same time, Lighthouse was seeking to raise capital. Part of the funds were to go to pay off a $19 million loan from a Florida bank, but the Whites did not disclose that Lawrence White may have had an “insider relationship” with the bank, the lawsuit complaint alleged.
Lighthouse, with 13,800 policies in force in Florida and more in Louisiana and other states, was placed into rehabilitation in 2021 by the Louisiana Department of Insurance. After the hurricane, Lighthouse officials may have believed they could weather the losses, and they continued to try and raise money. But by April 2022, regulators had deemed Lighthouse insolvent and began liquidation proceedings.
Fortinbras withdrew from the lawsuit earlier in the proceedings, but HT Investments and two Silver Rock funds continued as plaintiffs. The bank, One Florida, in March settled a separate lawsuit brought by the funds, court records show. The investment funds also sued TigerRisk Partners, now known as Howden Tiger Capital, alleging that it misled investors in an effort to raise capital shortly before Lighthouse was put into receivership.
