10. Related Party Transactions

Fox Paine & Company

As of September 30, 2015, Fox Paine beneficially owned shares having approximately 93% of the Company’s total outstanding voting power. Fox Paine has the right to appoint a number of the Company’s Directors equal in aggregate to the pro rata percentage of the voting shares of the Company beneficially held by Fox Paine for so long as Fox Paine holds an aggregate of 25% or more of the voting power in the Company. Fox Paine controls the election of all of the Company’s Directors due to its controlling share ownership. The Company’s Chairman is a member of Fox Paine. The Company relies on Fox Paine to provide management services and other services related to the operations of the Company.

At September 30, 2015 and December 31, 2014, Global Indemnity Reinsurance was a limited partner in Fox Paine Capital Fund, II, which is managed by Fox Paine. This investment was originally made by United National Insurance Company in June 2000 and pre-dates the September 5, 2003 acquisition by Fox Paine of Wind River Investment Corporation, which was the predecessor holding company for United National Insurance Company. The Company’s investment in this limited partnership was valued at $3.3 million and $3.4 million at September 30, 2015 and December 31, 2014, respectively. At September 30, 2015, the Company had an unfunded capital commitment of $2.4 million to the partnership. There were no distributions received from the limited partnership during the third quarter of 2015 or 2014. During the nine months ended September 30, 2015, the Company received a distribution of $0.8 million. There were no distributions received from the limited partnership during the nine months ended September 30, 2014.

The Company relies on Fox Paine to provide management services and other services related to the operations of the Company. The Company incurred management fees of $0.4 million and $0.5 million during the quarters ended September 30, 2015 and 2014, respectively, and $1.4 million and $1.5 million during the nine months ended September 30, 2015 and 2014, respectively, as part of the annual management fee paid to Fox Paine. As of September 30, 2015 and December 31, 2014, unpaid management fees, which were included in other liabilities on the consolidated balance sheets, were $2.1 million and $0.6 million, respectively.

In connection with the acquisition, the Company agreed to pay to Fox Paine an investment banking fee of 3% of the amount paid plus the additional capital required to operate American Reliable on a standalone basis and a $1.5 million investment advisory fee, which in the aggregate, totaled $6.5 million. This amount is included in corporate and other operating expenses on the Company’s Consolidated Statements of Operations during the nine months ended September 30, 2015. As payment for these fees, 267,702 A ordinary shares of Global Indemnity were issued under the Global Indemnity plc Share Incentive Plan in May, 2015. These shares will be registered but cannot be sold until the earlier of five years or a change of control. See Note 12 for additional information on the Global Indemnity plc Share Incentive Plan.

Cozen O’Connor

The Company incurred $0.2 million and $0.02 million for legal services rendered by Cozen O’Connor during the quarters ended September 30, 2015 and 2014, respectively. The Company incurred $0.6 million and $0.1 million for legal services rendered by Cozen O’Connor during the nine months ended September 30, 2015 and 2014, respectively. Stephen A. Cozen, the chairman of Cozen O’Connor, is a member of the Company’s Board of Directors.

Crystal & Company

The Company incurred brokerage fees with Crystal & Company, an insurance broker, of $0.1 million during each of the quarters ended September 30, 2015 and 2014 and $0.2 million during each of the nine months ended September 30, 2015 and 2014. James W. Crystal, the chairman and chief executive officer of Crystal & Company, is a member of the Company’s Board of Directors.

Hiscox Insurance Company (Bermuda) Ltd.

Global Indemnity Reinsurance was a participant in two reinsurance agreements with Hiscox Insurance Company (Bermuda) Ltd. (“Hiscox Bermuda”) while Steve Green, the President of Global Indemnity Reinsurance, was a member of Hiscox Bermuda’s Board of Directors. Steve Green was a member of Hiscox Bermuda’s Board of Directors until May, 2014. The Company estimated that the following earned premium and incurred losses related to these agreements have been assumed by Global Indemnity Reinsurance from Hiscox Bermuda:


	Quarters Ended September 30,
(Dollars in thousands)	2015			2014
Assumed earned premium	$	47		$	1,823
Assumed losses and loss adjustment expenses		(167	)		504

	Nine Months Ended September 30,
(Dollars in thousands)	2015			2014
Assumed earned premium	$	2,294		$	4,639
Assumed losses and loss adjustment expenses		476			1,349

Net balances due to Global Indemnity Reinsurance under this agreement are as follows:


(Dollars in thousands)	September 30, 2015			December 31, 2014
Net receivable (payable) balance	$	(61	)	$	2,897