Magazine article American Banker

MGIC Sues Radian to Release More Financial Figures

Magazine article American Banker

MGIC Sues Radian to Release More Financial Figures

Article excerpt

MGIC Investment Corp. has sued Radian Group Inc. to force the Philadelphia company to provide additional information so MGIC can determine whether their $5 billion merger deal must close.

In the lawsuit, filed late Monday in the U.S. District Court for the Eastern District of Wisconsin in its headquarters city of Milwaukee, MGIC asked for an expedited hearing and said Radian had denied several requests for further information in the past three weeks.

Radian responded Tuesday by saying it is "compelled to carefully assess the proprietary nature of subsequent information requests to ensure that Radian does not provide MGIC with an unfair competitive advantage" if the merger does not close.

MGIC said this month that it believes it can walk away from the deal, because the two companies are expected to write off their $1 billion investment in C-Bass LLC, a subprime mortgage joint venture that has been pushed into a liquidity crisis by margin calls.

In the suit, MGIC said that the C-Bass writedown "constituted, or would reasonably be expected to constitute, a material adverse effect."

MGIC also said it has requested a slew of information on Radian's financial guaranty business, which insures municipal and asset-backed bonds; the rescission of mortgage insurance policies; losses in its second mortgage portfolio; loan levels; debt structures; and even financial forecasts and rating agency presentations.

All the information is readily available, according to the suit.

"Radian's wholly deficient response confirms Radian's strategy of delay," MGIC said in the complaint. …

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