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All in all, the complaint essentially concedes that the Chartwell and LaSalle

acquisitions, and the reorganization of Trenwick, were overseen by a parent board with

only one management director, Billett. That management director is not alleged to have

received excessive compensation, and he and other officers and directors simply received

replacement options in the new publicly-listed holding company that replaced the options

they held in the former publicly-listed holding company.

D. Trenwick Falls Into Financial Distress In 2002 And 2003

This case is before the court because something bad happened. The bad here was

that Trenwick eventually faltered as an entity. Both the public holding company

Trenwick and Trenwick America filed for bankruptcy in August 2003.

The complaint’s allegations regarding the circumstances giving rise to the

bankruptcy filing are sparse. In a paragraph, the complaint tersely indicates that by the

end of 2001, Trenwick America was “substantially under-reserved” despite not having

material exposure to losses caused by the September 11, 2001 terrorist attacks.37 In 2002,

Milliman is alleged to have conducted an analysis revealing that Trenwick America

remained unreserved. Allegedly, Trenwick did not disclose that results of that analysis.38

During the same year, Trenwick allegedly caused Trenwick America to pay

increased fees on the $230 million portion of the credit facility that supported the Lloyd’s

37 38

Compl. ¶ 91.

28

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