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Thursday, November 12, 2009

Hand-in-Hand to change Ben Franklin's plan

Revised: Pennsylvania Insurance Commissioner Joel Ario has signed off on the planned reorganization of the 257-year-old, Ben Franklin-founded Philadelphia Contributionship for the Insurance of Houses from Loss by Fire, known as the Hand-in-Hand for the sign that marks 5,000 homes and buildings it insures. Ario's order and other documents here.

Carl Esser, a retired lawyer who filed a class-action lawsuit challenging the earlier reorganization of the Green Tree, Philadelphia's other (and now-vanished) Colonial-era home insurer, and initially challenged aspects of the Contributionship's plan, says he's dropped his opposition now that management's provided more details.

The Hand-in-Hand wants to set up a holding company, making it easier to raise money, merge with other firms, and finance the company's home-alarm business, Vector Security Holdings. Acccording to Ario's order allowing the plan, policyholders who are now members of the Contributionship will become members of the new holding company. He also noted the Contributionship has a $190 million surplus.

Ario's move clears the way for a Dec. 4 reorganization vote at the Contributionship's office, 212 S. Fourth St., 11 a.m., according to a proxy statement Contributionship president Robert Whitlock sent members last week. I haven't heard back from Whitlock's office.

Esser last summer questioned the need for changing the Hand-in-Hand, after all these years, to a corporate form of organization, which he worried could some day attract the kind of "go-go" management Esser blames for the disappearance of Green Tree and other formerly member-owned Philadelphia institutions. He also said the company needed to provide more information about voting rights and dividends.

But in a letter to Whitlock after the company issued a revised and expanded plan, Esser says the company's current proposal  "is well done" and he's dropped plans to fight it.

 
Posted by Joseph N. DiStefano @ 2:39 PM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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