An entity that showed an interest in acquiring Penn Treaty American Corp. has let the exclusivity period for a non-binding letter of intent expire, Penn Treaty says.
Penn Treaty, Allentown, Pa., had agreed to sell the potential buyer a majority interest in its Penn Treaty Network America Insurance Company subsidiary and almost all of its other operations.
Penn Treaty recently moved the deadline for the deal to Feb. 28, from Feb. 13, but apparently has been unable to complete the deal.
The letter of intent was signed Dec.15, 2008.
Because Penn Treaty has not put a deal in place by the letter-of-intent expiration date, Penn Treaty will continue to be in rehabilitation with the Pennsylvania Insurance Department, which took control of the company in January.
Penn Treaty entered rehabilitation voluntarily.
Under the terms of the rehabilitation, the Pennsylvania department will decide what staffing levels are appropriate for the company, Penn Treaty says.
Day-to-day activities of the company are being overseen by Joseph DiMemmo, a deputy commissioner with the department, which is headed by Joel Ario, the state’s insurance commissioner.
The department and the company’s insurance subsidiaries, including American Network Insurance Company, will prepare a recommendation for the rehabilitation of Penn Treaty by April 6, the company says. The plan, to be submitted to Pennsylvania Commonwealth Court, may involve consideration of other offers from potential acquirers, the company says.