By Jarrett Banks
Haymarket Insurance Co., a unit of A-CAP, has filed a complaint in the Southern District of New York against private equity firm Leadenhall Capital Partners, accusing the latter of fraud in its dealings with Miami investment firm 777 Partners.
Both A-CAP and Leadenhall have been creditors to 777, which once tried to buy the Premier League’s Everton Football Club. In the complaint, Haymarket argues that Leadenhall was grappling with mounting losses well beyond its ties to 777 by late 2022, as a series of major investments deteriorated simultaneously, intensifying investor concern and destabilizing the firm’s capital base.
The complaint is the latest development in the saga around London-based Leadenhall, which positions itself as a specialist in insurance-linked investments, spanning catastrophe bonds, collateralized reinsurance, life and health-linked risk transfer, and insurance-adjacent private credit. Leadenhall has faced troubles with a string of other deals, including Friday Health Plans, Health IQ, and Reverse Mortgage Investment Trust.
Founded in 2008, London-based Leadenhall operates as a joint venture connected to Japan’s MS&AD insurance group, with regulatory registrations in the UK, the U.S., and Bermuda.
According to the complaint by Haymarket, the scope of the losses was significant enough that at least one major Canadian pension fund withdrew the remaining portion of a $300 million commitment, adding pressure at a critical moment.
Internally, Leadenhall was carrying roughly $650 million in exposure across four large non-777 platforms that were being portrayed as stable or on track for monetization, the complaint said. Instead, each soon entered bankruptcy, regulatory seizure, or controlled wind-down, resulting in substantial impairment relative to what had been communicated to investors, it said.
The largest problem assets included RMIT and Reverse Mortgage Funding, where Leadenhall claimed more than $230 million in secured positions before a federal agency seized the core servicing business; Friday Health Plans, an ACA insurer with about $200 million of Leadenhall exposure that was later liquidated by state regulators; Hi.Q (Health IQ), a Medicare Advantage commissions platform with roughly $75 million in exposure that entered Chapter 7; and Integrity Australia, a life insurer that lost its license and was placed into runoff, the complaint said.
RMIT filed for Chapter 11 in late 2022, citing rising interest rates and liquidity pressure. Over the following year, bankruptcy court records showed repeated disputes over debtor-in-possession financing, administrative claims, and creditor priority. While the estate burned millions of dollars per month in professional fees, resolution was halting. Judges ultimately approved a wind-down prioritizing larger creditors, while smaller disputes lingered long past their economic relevance.
In 2023, Texas placed Friday into liquidation. Georgia declared it insolvent. Oklahoma imposed regulatory supervision. By mid-year, the company had terminated its workforce and transferred assets for liquidation. Court filings later revealed that Friday was so depleted it struggled to maintain legal representation in post-collapse litigation.
Collectively, the failures reflected what the Haymarket filing describes as a pattern of underwriting missteps, capital-intensive structures, and impaired exits, leaving Leadenhall with hundreds of millions of dollars in realized and unrealized losses.
As bankruptcies and regulatory interventions mounted through 2023, investor scrutiny intensified, and any further write-downs—particularly those linked to the firm’s relationship with 777 and its structured-settlement collateral—risked deepening an already destabilizing situation for Leadenhall’s funds, the complaint said.
Leadenhall’s profile rose sharply in 2024 with its New York federal lawsuit against 777 and A-CAP, alleging fraud, breach of contract, and improper pledging of collateral. Leadenhall alleges 777 violated court orders related to the assets, complicating Everton’s sale.
Courts granted temporary restraining orders freezing assets tied to what Leadenhall claimed was more than $600 million in accelerated debt. Trade publications noted that judges allowed discovery to proceed, signaling the seriousness of the allegations.
This month, Leadenhall asked a New York federal judge to reject 777 Partners’ bid to block access to documents produced by a former executive, saying the firm has no right to screen a third party’s records for relevance, according to a report by Debtwire. The Leadenhall filing rejected claims of ethical misconduct and accused 777 of delaying discovery, Debwire said.
Leadenhall didn’t immediately respond to a request for comment from CorpGov.
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