Patriot National lays off 250 workers

Patriot National, a Fort Lauderdale-based insurance services provider, is terminating 250 of its employees — a third of its workforce — after its largest customer agreed to enter into state-supervised receivership.

Guarantee Insurance Co., a workers compensation provider closely related to Patriot National, accounted for 60 to 70 percent of Patriot National’s business, the latter company said in a filing with the Securities and Exchange Commission.

Patriot National expects state Chief Financial Officer Jimmy Patronis to obtain a court order placing Guarantee Insurance into receivership, Gex “Jay” Richardson, Patriot’s general counsel and executive vice president of administration, said by phone on Wednesday.

On Nov. 13, Guarantee’s board of directors agreed to a Consent Order of Rehabilitation or Liquidation.

In the SEC filing, Patriot National said it met with state insurance regulators numerous times, most recently on Nov. 20, “seeking to obtain both payment for past services rendered to [Guarantee] and an agreement that would allow the company to provide and receive payment for future services while [Guarantee] is in receivership.

Based on the most recent meeting, Patriot National “does not believe these efforts will be successful,” the filing said.

“It’s extremely unfortunate,” Richardson said. “No one wants to do this before the holiday. The bottom line is we need to restructure our business to align with revenues going forward.”

A related announcement Wednesday that Patriot National struck a forbearance agreement with its lenders sent the publicly traded stock plummeting by 66 percent to close at 36 cents a share.

The agreement gives Patriot National until Dec. 3 before its lenders can seek to collect the balance of the company’s loans or exercise their related rights triggered by Patriot National’s default of its credit agreements, the filing said.

Richardson said Patriot National will be able to survive by continuing to provide services to its remaining customers.

The bulk of the layoffs will be in Patriot National’s claims management division because the company will no longer be handling claims work for Guarantee, Richardson said.

Guarantee wrote about $280 million in worker’s premiums in 2016.

Richardson said he expects the state to transfer all of the company’s policies to other worker’s compensation insurers.

The terminated workers are based both in Fort Lauderdale and in divisions outside of Patriot National’s downtown headquarters, Richardson said. The company is located at the Bank of America Plaza at Las Olas City Centre, 401 E. Las Olas Blvd.

Until recently, Patriot National and Guarantee Insurance Co. were both controlled by Steve Mariano, who remains largest shareholder of the two companies. compensation