NYSE initiates delisting of Fort Lauderdale-based Patriot National

Sept. 29--FORT LAUDERDALE -- Patriot National Inc., an insurance industry services provider based in Fort Lauderdale, on Friday announced that it is subject to suspension and delisting by the New York Stock Exchange.

In a news release on Friday, the company said it received notice from the NYSE on Sept. 25 that it was not in compliance with the exchange's continued listing standards because the average global market capitalization of Patriot National's common stock was less than $50 million over a consecutive 30-day trading period while its last reported stockholders' equity was less than $50 million.

The company offered no further comment on the matter and a spokeswoman did not immediately responded to questions about the delisting's effect on its operations.

Patriot National provides technology and outsourcing solutions to insurance companies, including general agency services, specialty underwriting and policyholder services, claims administration services and self-funded health plans.

Patriot National is an affiliate of workers compensation provider Guarantee Insurance Co., which in August was placed on administrative supervision for 120 days by state insurance regulators.

The supervision, including an order that the company stop writing new business, stemmed from an independent financial audit that expressed "substantial doubt" about Guarantee's ability to continue as a going concern. The audit, by BDO USA LLP, found that Guarantee "overstated" its level of capitalization in its 2016 financial statements.

In late August, Patriot National's general counsel told the Sun Sentinel that the company disagreed with the auditor's statement and voluntarily agreed to the state supervision.

The attorney said that Patriot National was not subject to the reorganization agreement but is working with Guarantee and the state because Guarantee is Patriot's largest customer.

Both companies were founded by Steven Mariano, who remains the largest shareholder of both companies but holds no executive position in either, the attorney said.

In March, Patriot National's stock price declined 25 percent after investors learned the company agreed to provide $30 million in capital to Guarantee in exchange for Guarantee extending its services contract with Patriot for at least 10 years.

The company is the target of several class-action lawsuits by shareholders.

Patriot National closed at $1.35 on the New York Stock Exchange at midday Friday, up 7 cents from Thursday's close. Its 52-week range was $1.02 to $9.04. Over the past five years, its price peaked at $18.60 on July 27, 2015.

The company went public in January 2015, then went on an acquisition spree, acquiring 17 companies during the year.

In November 2016, a special committee of the company's board of directors rejected a takeover bid from Ebix Inc. worth $475 million. The offer followed a previous unsolicited offer in June 2016 in which Ebix proposed acquiring 100 percent of Patriot National's stock for $9.50 a share.

Companies delisted from one of the major exchanges can choose to trade on the less-regulated Over the Counter Bulletin Board [OTCBB] or the pink sheets system, according to Investopedia.com.

rhurtibise@sun-sentinel.com, 954-356-4071, twitter: twitter.com/ronhurtibise

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