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Assumed Notes. But Trenwick America also emerged out of the internal restructuring as

the subsidiary under which all of Trenwick’s U.S. subsidiaries operated. For the year

ending December 31, 2002, these consolidated American operations generated

approximately 52% of Trenwick’s revenues, generating $571 million in annual revenue.77

One can accept the notion that Trenwick as a whole, and Trenwick America, in

general, emerged from the Chartwell and LaSalle transactions as a more leveraged

organization. Trenwick also was a much larger overall operation, having absorbed

Sorema, Chartwell, and LaSalle in less than four years.

What the complaint fails to plead are facts supporting an inference that Trenwick

America was insolvent as of the time of the restructuring, much less that the Trenwick

directors believed that to be the case. In this connection, it is important to recognize that

the plain terms of documents the complaint draws from and references to — the LaSalle

merger proxy and the Trenwick/LaSalle Joint Proxy Statement — explain the purpose of

the restructuring. Namely, the restructuring was undertaken in order to create chains of

American, English, and Bermudan subsidiaries, chains that would enable favorable tax

treatment for Trenwick.

The complaint fails to articulate a rational premise for the notion that the

restructuring, and the allocation of Trenwick’s debt among the various chains, had some

other, less obvious, and more nefarious purpose. In particular, there are no facts pled that

support a rational inference that Trenwick’s board believed it was structuring the chains

77 Stone Aff. Ex. 1 at 11 (Trenwick America Amended Disclosure Statement For Plan Of Reorganization).


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