December 23, 2019, Delaware –Earlier last week, Peter Kravitz, as Litigation Trustee of the PNI Litigation Trust for the bankrupt insurance technology and outsourcing firm Patriot National Inc. (the “Debtor”) brought a lawsuit against the company’s founder and ex-CEO in the Delaware bankruptcy court to clawback more than $6. 2 million in severance and bonus payments.
More than 50 avoidance actions had been filed in the Debtor’s bankruptcy case so far. According to the complaint, the Debtors provided comprehensive services to its insurance carrier clients, primarily in the worker’s compensation section. As an independent national provider of comprehensive technology-enabled outsourcing solutions, the Debtors helped insurance carriers, employers, and other clients mitigate risk, comply with complex regulations, and save time and money.
As alleged in the complaint, the Debtors’ financial difficulties led to the decision to file the bankruptcy case are attributable to a combination of factors, all of which placed severe stress on the Debtors’ liquidity position in the months leading up to the petition date. These factors included, among other things: (i) the financial distress and eventual receivership of the Debtors’ largest customer; (ii) failed attempts to sell the Debtors; and (iii) the Defendant’s resignation of his position as Chief Executive Officer of Debtor.