LAWSUIT OVERVIEW
The collapse of Lighthouse Insurance is a complex story of financial mismanagement, alleged fraud, and the downfall of a once-prominent company.
Key figures include Patrick L. White, the former President and CEO, and his father Lawrence E. White, the former owner of Lighthouse Insurance Companies. Allegations against them, along with TigerRisk representatives Tim Fox (VP of Howden Capital Markets & Advisory), Kyle Menendez (Managing Director of Howden Reinsurance), and Jarad Medea (CEO of Howden Capital Markets & Advisory), suggest they played significant roles in the company’s downfall.
The timeline below traces events from early financial struggles and significant losses to the devastating impact of Hurricane Ida, ultimately leading to the liquidation of Lighthouse Insurance.
It explores how these individuals allegedly misled investors, concealed crucial financial information, and contributed to the collapse, leaving thousands of policyholders in Florida and Louisiana without coverage. This account reveals the broader implications and consequences of corporate deception in the insurance industry.
TIMELINE OF LAWSUIT / COLLAPSE:
2018-2020
Early Struggles and Losses
2018-2019
Lighthouse Insurance began facing significant financial difficulties, reporting considerable losses over these years. Despite the challenges, the company continued its operations and sought additional capital investments.
2020
The financial troubles intensified as Lighthouse Insurance reported a net loss of $72 million. This staggering loss was exacerbated by three major storms hitting Louisiana, further straining the company’s resources.
July 2021
Conservation Proceedings
In an effort to stabilize Lighthouse Insurance, the Louisiana Department of Insurance placed the company into a confidential conservatorship. This move was designed to give the company time to find potential buyers and address its financial issues. However, this critical information was not disclosed to potential investors.
August 2021
Hurricane Ida
Hurricane Ida struck Louisiana in August 2021, causing extensive damage and pushing Lighthouse Insurance deeper into financial distress. The company’s projected losses from the hurricane exceeded $300 million, further complicating its financial recovery.
September 2021
Financial Instability
As the financial situation worsened, Demotech, a financial rating agency, planned to downgrade Lighthouse’s financial strength rating due to the escalating losses from Hurricane Ida. Despite these dire circumstances, Lighthouse’s management, led by Patrick White, continued to seek additional investments .
November 2021
Investment from Outside Creditor
An outside creditor decided to invest $65 million in Lighthouse Insurance in November 2021. According to court documents, this investment was made based on assurances from Lighthouse’s management, including Patrick White, and representatives from TigerRisk, such as Tim Fox, Kyle Menendez, and Jarad Madea. These assurances claimed that the company’s losses were manageable and covered by reinsurance.
Early 2022
Disclosure of Financial Distress
In February 2022, Patrick White informed investors that Lighthouse was in financial distress. This revelation came just months after securing the investment from the outside creditor group. In March 2022, Demotech withdrew its financial rating for Lighthouse, and by April, the Louisiana Commissioner placed the company into liquidation proceedings.