FedNat Holding Company: NOTICE OF SALE OF CERTAIN ASSETS AT AUCTION

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FT. LAUDERDALE DIVISION”
www.flsb.uscourts.gov

In re: FedNat Holding Company, et al^[1]. Debtors.
Case No.: 22-19451-PDR
Chapter 11 (Jointly Administered)

NOTICE OF SALE OF CERTAIN ASSETS AT AUCTION

1. The above-referenced debtors and debtors-in-possession (the “Debtors“) have entered into that certain Asset Purchase Agreement (the “Purchase and Sale Agreement“) with NSI Insurance Group, LLC (the “Proposed Purchaser“) to sell certain of the assets of Debtor FedNat Underwriters, Inc. (“FNU” and the assets thereof the “Purchased Assets“) to the Proposed Purchaser. The Debtors’ ability to close the transaction contemplated by the Purchase and Sale Agreement is subject to higher or better offers and the approval of the United States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court“).
2. The Debtors are soliciting offers for the Purchased Assets, and the Bankruptcy Court has entered the Order Pursuant to 11 U.S.C. §§ 105, 363, 365, 503 and 507 and Fed. R. Bankr. P. 2002, 6004, And 6006 (A) Establishing Bid and Auction Procedures for the Proposed Sale of Certain of Debtor FedNat Underwriters, Inc.’s Assets; (B) Approving the Purchase and Sale Agreement; (C) Approving Related Bid Protections; (D) Scheduling an Auction and a Sale Hearing and Approving Notice Thereof; (E) Approving Procedures for Determining Cure Amounts for Executory Contracts and Unexpired Leases to be Assumed and Assigned and Notice Thereof; and (F) Granting Related Relief [ECF No. 227] (the “Bid Procedures Order“) approving auction and sale procedures (the “Bid Procedures“) for the Purchased Assets.[2] Interested bidders are encouraged to read the Bid Procedures carefully and, for further information, are invited to contact the bankruptcy counsel for the Debtors at Nelson Mullins Riley & Scarborough LLP, 150 Fourth Avenue, North, Suite 1100, Nashville, TN 37219 (Attn: Shane G. Ramsey) and 1320 Main Street, Columbia, SC 29201 (Attn: B. Keith Poston).
3. On February 27, 2023 the Debtors filed the Motion Pursuant to 11 U.S.C. §§ 105, 363, 365, 503 And 507 and Bankruptcy Rules 2002, 6004 and 6006 for (I) Entry of an Order (A) Establishing Bid and Auction Procedures Related to the Sale of Certain of Debtor FedNat Underwriters, Inc.’s Assets; (B) Approving Related Bid Protections; (C) Scheduling an Auction and Sale Hearing; (D) Establishing Certain Notice Procedures for Determining Cure Amounts for Executory Contracts and Unexpired Leases to be Assumed and Assigned; and (E) Granting Related Relief; and (II) Entry of an Order (A) Approving the Sale of Certain of Debtor FedNat Underwriters, Inc.’s Assets Free and Clear of All Liens, Claims, Encumbrances and Interests; and (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases [ECF No. 197] (the “Sale Motion“).
4. Pursuant to the Sale Motion, the Debtors propose to: (a) sell the Purchased Assets to the Proposed Purchaser (or such other party that submits the highest or otherwise best bid at an auction (the “Auction“)), free and clear of all liens, claims, or encumbrances thereon, except for certain assumed liabilities and permitted encumbrances specifically described in the Purchase and Sale Agreement; and (b) assume and assign certain executory contracts and unexpired leases of the Debtors to the Proposed Purchaser (or such other party that submits the highest or otherwise best bid at the Auction).
5. Participation at the Auction is subject to the Bid Procedures and the Bid Procedures Order. The Bid Procedures approved by the Bid Procedures Order describe, inter alia, the terms of the bidding process, the requirements and deadlines for participation therein, required terms of any bids, and the time, location and conduct of the Auction.
6. The Bankruptcy Court has scheduled the Auction of the Purchased Assets for March 24, 2023 at 9:30 A.M. (prevailing Eastern Time) at the offices of Nelson Mullins Riley & Scarborough LLP, 100 S.E. 3rd Ave., Ste. 2700, Fort Lauderdale, FL 33394. All interested parties are invited to submit a qualifying bid to purchase the Purchased Assets. The deadline for submitting such bids is March 23, 2023 at 12:00 P.M. (prevailing Eastern Time).
7. The Bankruptcy Court has scheduled a hearing for March 28, 2023 at 1:30 P.M. (prevailing Eastern Time) (the “Sale Hearing“) to consider approval of the winning bid and confirm the results of the Auction. The Sale Hearing will be held before the Honorable Peter D. Russin, United States Bankruptcy Judge, at the United States Bankruptcy Court for the Southern District of Florida, 299 E. Broward Blvd., Fort Lauderdale, Florida 33301.
8. If no Auction is held, the Debtors will file a notice no later than March 23, 2023 at 5:00 P.M. (prevailing Eastern Time) with the Court in each of the Debtors’ bankruptcy cases stating that there will be no Auction (the notice will be posted at the Court’s website https://ecf.flsb.uscourts.gov/ which requires a court-issued login and passcode to access the notice). In the event that an Auction is not held, the Debtors will seek approval of the Sale of the Purchased Assets to the Proposed Purchaser at a hearing before the Court proposed to be held at the United States Courthouse, 299 East Broward Blvd., Ft. Lauderdale, Florida 33301, before the Honorable Peter D. Russin, United States Bankruptcy Judge, on March 28, 2023.

9. Any objection to any of the relief to be requested at the Sale Hearing must be in writing, state the basis of such objection with specificity, comply with the Bankruptcy Rules and Local Rules, and shall be filed with the Bankruptcy Court by March 23, 2023 at 12:00 P.M. (prevailing Eastern Time) (the “Sale Objection Deadline“). At the same time, any objector must also serve a copy of the objection, so as to be received by the Sale Objection Deadline, on: (a) the Debtors’ counsel, (i) Nelson Mullins Riley & Scarborough LLP, 150 Fourth Avenue, North, Suite 1100, Nashville, TN 37219 (Attn: Shane G. Ramsey) and 1320 Main Street, Columbia, SC 29201 (Attn: B. Keith Poston); (b) the Debtors, Katie Goodman, 1 East Broward, Suite 700, Fort Lauderdale, FL 33301, E-Mail: kgoodman@gggmgt.com; (c) counsel to the Proposed Purchaser, Lynne B. Xerras, Esq., Holland & Knight LLP, 10 St. James Avenue, 11th Floor, Boston, MA, 02116, E-mail: lynne.xerras@hklaw.com; and Joaquin J. Alemany, Esq., Holland & Knight LLP, 701 Brickell Avenue, Suite 3300, Miami, Florida 33131, E-mail: joaquin.alemany@hklaw.com; (d) the Office of the United States Trustee for the Southern District of Florida, (i) 51 SW First Avenue, Room 1204, Miami, FL 33130; and (ii) J. Steven Wilkes, 501 East Polk Street, Suite 1200, Tampa, Florida 33602, E-Mail: Wilkes@usdoj.gov and (e) counsel to the Official Committee of Unsecured Creditors (a) Pachulski Stang Ziehl & Jones LLP, Bradford J. Sandler and Paul J. Labov, 780 Third Avenue, 34th Floor, New York, NY 10017-2024, E-mail: bsandler@pszjlaw.com; and PLabov@pszjlaw.com, and (b) Bast Amron LLP, Jeffrey Bast and Hayley Harrison, One Southeast Third Avenue, Suite 2410, Miami, FL 33131, E-mail: jbast@bastamron.com; and hharrison@bastamron.com. Any party opposing the relief sought at the Sale Hearing must appear at the Sale Hearing or any objections or defenses may be deemed waived. You are reminded that Local Rule 5072-2 restricts the entry of cellular telephones, cameras, recording devices or other electronic devices (such as computers) into the Courthouse absent a specific order of authorization issued beforehand by the presiding judge, a valid Florida Bar identification card, or pro hac vice order. Please take notice that as an additional security measure a photo ID is required for entry into the Courthouse.

10. All requests for information concerning the Purchased Assets should be directed toward the Debtors’ counsel, who can be contacted at Nelson Mullins Riley & Scarborough LLP, 150 Fourth Avenue, North, Suite 1100, Nashville, TN 37219 (Attn: Shane G. Ramsey) and 1320 Main Street, Columbia, SC 29201 (Attn: B. Keith Poston).

11. Copies of the Sale Motion, together with all exhibits and schedules thereto, this Order, the Notice of Auction and Sale Hearing, and the Notice of Assumption and Assignment will be available upon request from counsel to the Debtors, directed to Nelson Mullins Riley & Scarborough LLP, 150 Fourth Avenue, North, Suite 1100, Nashville, TN 37219 (Attn: Shane G. Ramsey) and 1320 Main Street, Columbia, SC 29201 (Attn: B. Keith Poston).

12. After the Auction, the Debtors shall file notice of the identity of the successful bidder, back up bidder, and the amount of the winning bid and back up bid with the court by the earlier of (a) 5 business hours after the close of the Auction or (b) noon on the first business day after the close of the Auction. At that same time, the Debtors shall serve notice of the same by fax, email or (if neither is available) overnight courier to all counterparties whose contracts are to be assumed and assigned and to all creditors who have requested the same in writing and provided their fax numbers, email address, or street address to counsel for the Debtors.

13. The Auction shall be open for attendance and observation to all creditors, whether or not such creditors have submitted bids or otherwise expressed intent to participate in the Auction, provided that such attendees provide Debtors’ counsel with written notice at least three (3) business days before Auction. The notice must include the name of the individuals who will represent such party’s interest at the Auction. The Debtors reserve the right in their reasonable discretion to exclude a party‑in-interest from the Auction.. All creditors wishing to be notified regarding any change in the location, date, or time of the Auction should send a request for notices regarding the Auction to counsel to the Debtors and include, with such request, an email address and/or facsimile number where such notices should be sent. Requests for notices regarding the Auction must be directed to Nelson Mullins Riley & Scarborough LLP, 150 Fourth Avenue, North, Suite 1100, Nashville, TN 37219 (Attn: Shane G. Ramsey) and 1320 Main Street, Columbia, SC 29201 (Attn: B. Keith Poston).

14. The Auction or Sale Hearing or both may be adjourned from time to time without further notice to creditors or parties in interest other than by announcement of the adjournment in open court or on the agenda filed by the Debtors with the Bankruptcy Court.

15. After the Auction, the Debtors shall file notice of the identity of the successful bidder, back up bidder, and the amount of the winning bid and back up bid with the court by the earlier of (a) 5 business hours after the close of the Auction or (b) noon on the first business day after the close of the Auction. At that same time, the Debtors shall serve notice of the same by fax, email or (if neither is available) overnight courier to all counterparties whose contracts are to be assumed and assigned and to all creditors who have requested the same in writing and provided their fax numbers, email address, or street address to counsel for the Debtors.

16. IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE RELIEF REQUESTED BY THE MOTION WITHOUT FURTHER NOTICE OR HEARING.

Date: March 13, 2023

Shane G. Ramsey
Florida Bar No.: 0026842
shane.ramsey@nelsonmullins.com
nelson mullins riley & scarborough llp
100 S.E. 3rd Avenue, Suite 2700
Ft. Lauderdale, FL 33394
Telephone: (954) 764-7060
Facsimile: (954) 761-8135

Nelson Mullins Riley & Scarborough LLP
150 Fourth Avenue, North, Suite 1100
Nashville, TN 37219
Phone: (615) 664-5300
Facsimile: (615) 664-5399

and

John T. Baxter
Admitted Pro Hac Vice
john.baxter@nelsonmullins.com
nelson mullins riley & scarborough llp
150 Fourth Avenue, North, Suite 1100
Nashville, TN 37219
Phone: (615) 664-5300
Facsimile: (615) 664-5399

and

Keith Poston
Admitted Pro Hac Vice
keith.poston@nelsonmullins.com
Nelson Mullins Riley & Scarborough LLP
1320 Main Street, 17^th Floor
Post Office Box 11070 (29211-1070)
Columbia, SC 29201
Telephone: (803) 799-2000
Facsimile: (803) 256-7500

Counsel for the Debtors and Debtors-in-Possession

[1] The Debtors in these Chapter 11 Cases are FedNat Holding Company; FedNat Underwriters, Inc.; ClaimCor, LLC; Century Risk Insurance Services, Inc.; and Insure-Link, Inc. The Debtors’ headquarters are located at 1 East Broward, Suite 700, Fort Lauderdale, FL 33301.

[2] Copies of the Bid Procedures Order, the Bid Procedures, and the Purchase and Sale Agreement can be obtained from Debtors’ counsel.