Kingsway Financial reaches agreement with Stilwell Group; special meeting won't be held

By Lisa Kerner

Charlotte, N.C., Feb. 10 - Stilwell Group said it withdrew its requisition for a special meeting of Kingsway Financial Services Inc. shareholders after reaching an agreement under which some board members will retire at the annual meeting in April.

The shareholder was seeking to end some payments to board members and to remove two legacy members from the Kingsway board, it was previously reported.

"We are happy to be moving forward with what will be a reconstituted board. I believe the board will act as owners," Joseph Stilwell said in a news release.

"This means selling or running off all non-core lines of business; this means lowering risk; this means using the freed-up capital to repurchase debt and equity; and this means making our remaining business efficient and profitable."

Stilwell Group, a New York-based money management firm, currently owns 4,975,000, or 9%, of Kingsway's outstanding shares.

Two Stilwell Group director nominees joined the Kingsway board under a separate settlement agreement in January.

Under the January settlement, W. Shaun Jackson agreed to step down from the board but remain the company's president and chief executive officer, and F. Michael Walsh will remain a director and the non-executive chairman of Kingsway.

Stilwell Group previously agreed that it will not seek to have its nominees elected to a majority of the board seats and will not seek to obtain control of the Mississauga, Ont., property and casualty insurance company for a three-year period.

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