CALDERWOOD & HARKNESS LLP Attorneys at Law
333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 814-7200 Facsimile: (305) 814-7201 www.calderwoodharkness.com
December 20, 2023
VIA EMAIL AND FACSIMILE CONFIDENTIAL
Patricia Kraus, Esq. Delvecchio & Kraus LLP 425 Park Avenue, 20th Floor New York, New York 10022
Re: Verimark Hospitality Group Inc. v. Ironclad Indemnity Corp. et al. Case No. 2022-CA-031547 (Eleventh Judicial Circuit of Florida, Miami-Dade County) Sub-Ref: Settlement Payment Instructions — Montclair Assurance Company and Sovereign Re Ltd.
Dear Ms. Kraus:
We write on behalf of our client, Verimark Hospitality Group Inc. ("VHG"), in connection with the Settlement Agreement and Mutual Release dated and fully executed as of December 19, 2023 (the "Settlement Agreement"), by and among VHG, Ironclad Indemnity Corporation, Pinnacle Surplus Lines Inc., Montclair Assurance Company, and Sovereign Re Ltd. The purpose of this letter is to provide wire transfer instructions for the settlement payments owed by your clients, Montclair Assurance Company ("Montclair") and Sovereign Re Ltd. ("Sovereign Re"), to VHG pursuant to the terms and conditions of the Settlement Agreement.
As you are aware, Section 3.1 of the Settlement Agreement requires each settling carrier to remit its respective allocated share of the aggregate settlement amount by lump-sum payment within forty-five (45) calendar days of the execution date of the Settlement Agreement. Because the Settlement Agreement was fully executed on December 19, 2023, the payment deadline for all carriers — including Montclair and Sovereign Re — is February 2, 2024. We respectfully request that your clients arrange for timely payment in accordance with the instructions set forth below, and we would appreciate your assistance in ensuring that funds are received well in advance of the contractual deadline to the extent practicable.
Settlement Payment Amounts
Pursuant to the Payment Allocation Schedule attached as Exhibit A to the Settlement Agreement, the settlement payments owed by your clients are as follows:
These amounts are consistent with and identical to the payment allocations set forth in Exhibit A to the Settlement Agreement, and we confirm that no adjustments, offsets, or modifications to these figures have been authorized or agreed upon since the date of execution. For your clients' convenience, the payments may be remitted either (a) as two separate wire transfers — one in the amount of $6,800,000.00 on behalf of Montclair and one in the amount of $3,800,000.00 on behalf of Sovereign Re — or (b) as a single combined wire transfer in the total amount of $10,600,000.00. If your clients elect to combine the payments into a single wire, we ask that the wire reference line clearly indicate that the transfer encompasses the obligations of both Montclair and Sovereign Re so that we may properly allocate and account for the funds upon receipt.
Wire Transfer Instructions
All settlement payments are to be made by wire transfer to Calderwood & Harkness LLP's Attorney Trust Account, which is an Interest on Trust Account (IOTA) maintained in accordance with the requirements of the Florida Bar. Please direct your clients' banking institutions to use the following wire transfer information:
Bank Name: Atlantic Commerce Bank, N.A.
Bank Address: 140 Broadway, 12th Floor, New York, New York 10005
ABA Routing Number: 021-073-418
Account Name: Calderwood & Harkness LLP Attorney Trust Account
Account Number: 8830-2241-7765
SWIFT Code (for international wires): ACBKUS33
Reference Line: "VHG v. Ironclad et al. — Settlement / 1021-00003"
We note that Sovereign Re Ltd. is domiciled in Hamilton, Bermuda, and accordingly, the wire remitted on behalf of Sovereign Re may originate from an international banking institution outside the United States. If payment on behalf of Sovereign Re is transmitted from an international bank, the originating institution should use the SWIFT code provided above (ACBKUS33) to direct the funds to our trust account at Atlantic Commerce Bank, N.A. We respectfully request that any intermediary bank fees, correspondent bank charges, or other transmission costs associated with the international wire transfer not be deducted from the settlement amount, so that the full sum of $3,800,000.00 is received into our trust account without diminution. If Sovereign Re's banking institution requires that fees be deducted from the transmitted amount, we ask that the wire be grossed up accordingly to ensure that the net amount received equals the contractual settlement figure. Should there be any questions or concerns about the mechanics of the international transfer, we are happy to coordinate directly with Sovereign Re's treasury department or banking contact.
Request for Advance Notice of Wire Transmission
To facilitate the prompt identification, verification, and reconciliation of incoming settlement funds, we respectfully request that Delvecchio & Kraus or the respective clients provide at least one (1) business day's advance notice prior to the initiation of each wire transmission. Such notice should include, at a minimum, the following information:
(a) the expected date of the wire transmission;
(b) the name of the originating bank;
(c) the wire reference or confirmation number assigned by the originating bank; and
(d) the amount of the wire and the identity of the settling party on whose behalf the payment is being made.
Advance notice should be directed to:
Tiffany Rosenthal Associate, Calderwood & Harkness LLP 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 814-7246
Email: trosenthal@calderwoodharkness.com
Upon clearance of each wire transfer into our trust account, Calderwood & Harkness will confirm receipt of the funds promptly by email to you and Mr. Cho. We anticipate that domestic wire transfers will clear within one (1) business day and that international wire transfers may require up to two (2) to three (3) business days for clearance, depending on the intermediary banking institutions involved.
Confirmation and Reconciliation
Upon receipt and clearance of the full $10,600,000.00 — whether received in a single wire or in two separate wires — Calderwood & Harkness will issue formal written confirmation to Delvecchio & Kraus acknowledging satisfaction of Montclair's and Sovereign Re's payment obligations under Section 3.1 of the Settlement Agreement.
For the sake of completeness and to provide full context regarding the status of the aggregate settlement, we note that the total settlement amount under the Settlement Agreement is $47,300,000.00, allocated among all four settling carriers as follows:
Separate wire transfer instructions have been provided to Fendowell Rourke & Stanton LLP for the settlement payments owed by Ironclad Indemnity Corporation and Pinnacle Surplus Lines Inc. in the aggregate amount of $36,700,000.00. We will coordinate the reconciliation of all incoming settlement funds and will notify all parties and their respective counsel once the full aggregate settlement amount has been received and cleared.
Dismissal Stipulation — Next Steps
We wish to advise you that a draft Joint Stipulation of Dismissal with Prejudice in Case No. 2022-CA-031547 is currently being prepared by our office and will be circulated to all parties' counsel shortly for review and comment. It is our intention to file the stipulation with the Eleventh Judicial Circuit, Miami-Dade County, before the Honorable Catherine Embry, following receipt and clearance of all settlement funds from all four settling carriers. We anticipate that, assuming timely payment by all carriers, the stipulation will be filed no later than mid-February 2024.
We respectfully request your cooperation, and that of your clients, in finalizing and executing the Joint Stipulation of Dismissal on an expedited basis so that we may proceed with the filing promptly upon confirmation that all funds have been received. If you have any comments or suggested revisions to the draft stipulation once circulated, we ask that you provide them within five (5) business days of receipt so that we may incorporate any agreed-upon changes without delay.
Confidentiality Reminder
We take this opportunity to remind you that, pursuant to Section 7.2 of the Settlement Agreement, the specific terms and amounts of the settlement are strictly confidential and may not be disclosed to any third party except as required by law, regulation, or court order, or as otherwise expressly permitted under the Settlement Agreement. While the existence of the settlement may be disclosed, the specific dollar amounts, the payment allocation among the carriers, and the terms of the mutual releases are subject to the confidentiality restrictions set forth therein.
In light of these obligations, we respectfully request that the wire transfer instructions set forth in this letter, as well as this correspondence in its entirety, be treated as confidential and be shared only with those individuals at Montclair Assurance Company and Sovereign Re Ltd. who have a direct need to know for purposes of processing and authorizing the settlement payment. We trust that your office will take appropriate measures to limit the distribution of this letter to the minimum number of personnel necessary to effectuate the wire transfers.
Contact Information
Should you or your clients have any questions regarding the wire transfer instructions, payment logistics, the reconciliation process, or any other matter related to the settlement payment, please do not hesitate to contact:
Tiffany Rosenthal Lead Associate Calderwood & Harkness LLP 333 SE 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 814-7246
Email: trosenthal@calderwoodharkness.com
Ms. Rosenthal is the primary point of contact for all settlement payment matters and is authorized to coordinate directly with your office and with the treasury or accounts payable departments of Montclair and Sovereign Re as needed.
Closing
On behalf of VHG and the entire Calderwood & Harkness litigation team, I would like to thank you and your colleagues at Delvecchio & Kraus for your professionalism and collegiality throughout the course of this litigation and, in particular, during the settlement negotiations. We greatly appreciate the cooperative and good-faith approach demonstrated by your team during the two-day mediation session before the Honorable Richard Mendelson (Ret.) at Keystone Dispute Resolution Inc. on December 4–5, 2023. That constructive engagement was instrumental in achieving a resolution that serves the interests of all parties, and we look forward to working with you to bring this matter to a smooth and efficient conclusion.
We appreciate your prompt attention to the payment instructions contained herein and look forward to receiving confirmation of the wire transfers at your earliest convenience.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Tiffany Rosenthal Associate
cc (via email):
Elaine Forsythe, Esq. — Partner, Calderwood & Harkness LLP (Responsible Partner)
Howard Bellamy, Esq. — Partner, Calderwood & Harkness LLP (Billing Partner)
Nathaniel Driscoll, Esq. — General Counsel, Verimark Hospitality Group Inc.
Raymond Cho, Esq. — Senior Associate, Delvecchio & Kraus LLP
Encl.: None (wire instructions contained herein)
| Settling Party | Policy Number | Payment Amount |
| Montclair Assurance Company | MAC-XS2-2022-09817 | $6,800,000.00 |
| Sovereign Re Ltd. | SRL-XS3-2022-5102 | $3,800,000.00 |
| Total (Delvecchio & Kraus Clients) | $10,600,000.00 | |
| Settling Carrier | Payment Amount | Counsel of Record |
| Ironclad Indemnity Corporation | $24,500,000.00 | Fendowell Rourke & Stanton LLP |
| Pinnacle Surplus Lines Inc. | $12,200,000.00 | Fendowell Rourke & Stanton LLP |
| Montclair Assurance Company | $6,800,000.00 | Delvecchio & Kraus LLP |
| Sovereign Re Ltd. | $3,800,000.00 | Delvecchio & Kraus LLP |
| Aggregate Settlement Total | $47,300,000.00 |