The holding company for 2 bankrupt long term care insurance carriers says it will be paying a dividend to shareholders.
Penn Treaty American Corp., Allentown, Pa., (OTC:PTYA) says its board of directors has announced it will pay 15 cents per share of common stock to shareholders of record as of Dec. 11.
The dividend is being financed from the proceeds Penn Treaty received from the sale of its former subsidiary, United Insurance Group Agency Inc. The company sold UAIG in November 2008 to LTC Global Inc., Medford, Ore., for about $14.2 million.
In January 2009, Pennsylvania Insurance Commissioner Joel Ario put the company’s Penn Treaty Network America and American Network Insurance Company subsidiaries in rehabilitation. Then, in October, Ario asked a state court for permission to liquidate the companies after failing to find a buyer for them. The court has yet to rule on the request.
The companies’ liabilities exceeded their assets by more than $1 billion, according to court filings.
A spokeswoman for the Pennsylvania Insurance Department notes that because UAIG was owned by the holding company, not the insurance companies, the proceeds from its sale would not be covered by the rehabilitation proceedings.