Company: MHLA
Filing Date: 2025-03-26
Form Type: DEFM14A
Source: 0001104659-25-028254
Chunk: 63

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-26
Form: DEFM14A
Chunk 63
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 brought against public companies that have entered into transaction agreements in an effort to enjoin the relevant transactions or seek monetary relief. Maiden may in the future be a defendant in one or more lawsuits relating to the combination agreement and the transaction and, even if any such future lawsuits are without merit or resolved in Maiden’s favor, defending against these claims could result in substantial costs and divert management time and resources from pursuing the completion of the transaction and from other potentially beneficial business opportunities. Maiden cannot predict whether such lawsuits will be brought against Maiden or the outcome of such lawsuits or others, nor can Maiden predict the amount of time and expense that will be required to resolve such litigation. An unfavorable resolution of any such litigation surrounding the combination agreement and the transaction could delay or prevent the completion of the transaction, which may adversely affect Maiden’s, Kestrel’s or, if the transaction is completed but delayed, the combined company’s business, financial position and results of operations.

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TABLE OF CONTENTS

Risks Relating to the Combined Company Following the Transaction

The combined company may not be able to recover amounts due from its reinsurers, which would adversely affect its financial condition.

The combined company will be a specialty program group offering fronting arrangements to domestic and foreign insurers that want to access specific U.S. property and casualty insurance business, which are collectively referred to as “capacity providers,” and will generally reinsure on a quota share basis up to 100% of the risk under these policies with these carriers in exchange for ceding fees. The combined company will write business initially through the AmTrust Insurance Companies, all subsidiaries of AmTrust through which Kestrel has been writing its business, and the combined company will have an option to acquire the AmTrust Insurance Companies from AmTrust.

The combined company will reinsure a substantial portion of the underwriting and operating risks in connection with its fronting arrangements to its capacity providers. The combined company will generally select either well capitalized, highly rated authorized capacity providers or will require the capacity providers to post collateral and/or obtain guarantees to secure the reinsured risks. However, if any of the capacity providers becomes insolvent or otherwise refuse to reimburse losses paid to these policyholders in a timely manner, the corresponding impact to the combined company’s ability to continue writing business through the AmTrust Insurance Companies could materially adversely affect the combined company’s financial condition and results of operations.

While the combined company generally will not hold net reserves for losses or loss adjustment expenses (“LAE”) that might arise as a result