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17 / 90

were added to the board.15

The board’s independent supermajority grew from 10/11 to

13/14.

As the merger proxy issued by Trenwick in connection with the LaSalle deal

makes clear, the redomiciliation of the Trenwick public holding company to Bermuda

was designed to secure advantageous tax treatment. Moreover, the merger proxy made

clear that Trenwick would conduct an internal restructuring of its various subsidiaries

before the merger “into three separate groups: a chain of U.S. corporations, a chain of

U.K. corporations and a chain of Bermuda corporations.”16 Pages 54 and 55 of the

merger proxy were largely devoted to explaining how the U.S. and non-U.S. subsidiaries

would be taxed after the merger and the benefits of Trenwick Group’s new Bermuda

status.

In the merger proxy, Trenwick’s financial status as of June 30, 2000 was reported.

As of that date, Trenwick had assets of nearly $3.5 billion, stockholders’ equity of $439

million, and a book value per common share of $26.98.17 In the same document, it was

reported that “All of Trenwick’s principal insurance and reinsurance subsidiaries are

rated A (Excellent) by A.M. Best Company, an independent insurance rating

organization. Standard & Poor’s Rating Services rates the financial strength of

Trenwick’s principal insurance and reinsurance subsidiaries as A+. Standard & Poor’s

also rates the Trenwick’s counterparty credit and senior debt as BBB+ and its preferred

15 at 64. Neither the briefs nor the complaint specify the identity of the former LaSalle directors who joined Trenwick’s board. at 92. at 10. 16 17

15

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