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Shareholders' Equity
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Shareholders' Equity
16.
Shareholders’ Equity

 

On August 28, 2020, Global Indemnity completed a scheme of arrangement and amalgamation that effected certain transactions (the "Redomestication") that resulted in the shareholders of Global Indemnity Limited becoming the holders of all of the issued and outstanding common shares of Global Indemnity Group, LLC.

 

The treasury shares of Global Indemnity Limited were not subject to the scheme of arrangement. The carrying value of the Global Indemnity Limited treasury shares, $4.1 million, were offset against the Additional Paid-in Capital account of Global Indemnity Limited, according to the Company’s policy regarding the treatment of treasury shares.

Issuance of Preferred Shares

 

On August 27, 2020, Global Indemnity Group, LLC issued and sold to Wyncote LLC (“Wyncote”), an affiliate of Fox Paine & Company, LLC, 4,000 Series A Preferred Interests at a price of $1,000 per Series A Preferred Interest, for the aggregate purchase price of $4,000,000. The issuance of Series A Preferred Interests to Wyncote was made pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Series A Preferred Interests are not convertible into or exchangeable for any other securities or property of Global Indemnity Group, LLC. The preferred shares are redeemable at the discretion of Global Indemnity Group, LLC after five years or at the discretion of the holders upon the occurrence of a change in control of Global Indemnity Group, LLC. While the preferred shares are non-voting, the preferred shareholders are entitled to appoint two additional members to Global Indemnity Group, LLC’s Board of Directors whenever the “Unpaid Targeted Priority Return” (as defined in the applicable Share Designation) with respect to the preferred shares exceed zero immediately following six or more “Distribution Dates” (as defined in the applicable Share Designation), whether or not such Distribution Dates occur consecutively and Global Indemnity Group, LLC’s Board of Directors is obligated to take, and cause Global Indemnity Group, LLC’s officers to take, any necessary actions to effectuate such appointments, including expanding the size of the Board of Directors, in connection with any exercise of the foregoing provisions.

 

Following the effective time of the Redomestication (the “Effective Time”), all of the issued and outstanding Series A Preferred Interests sold to Wyncote remain outstanding as "Series A Cumulative Fixed Rate Preferred Shares", unaffected by the Scheme of Arrangement and subject to the terms of the Second Amended and Restated Limited Liability Company Agreement of Global Indemnity Group, LLC (the “LLCA”) and that certain Share Designation, effective as of the Effective Time, that sets forth the designation, rights, preferences, powers, duties, restrictions, limitations and obligations of the Series A Cumulative Fixed Rate Preferred Shares from and after the Effective Time.

Distribution Restrictions

The ability of Global Indemnity Group, LLC to pay distributions is subject to applicable federal and state laws and Global Indemnity Group, LLC’s LLCA. Distributions of cash or other assets of Global Indemnity Group, LLC may be paid to Global Indemnity Group, LLC’s shareholders out of Global Indemnity Group, LLC’s assets legally available therefor only when, and if determined by the Board. Each Series A Preferred Shareholder is entitled to a “Priority Return” (as defined in the applicable Share Designation). On each Distribution Date, Global Indemnity Group, LLC shall make a distribution to each holder of the Series A Preferred Shares out of, and subject to a determination by the Board that the Company has on the applicable Distribution Date, funds legally available therefor, payable in cash only, in an amount equal to the estimated amount necessary to reduce the Unpaid Priority Return of each Series A Preferred Share immediately after such Distribution Date to zero. All such distributions shall be made pro rata in relation to each such Series A Preferred Share’s Unpaid Priority Return.

 

Since Global Indemnity Group, LLC is a holding company and has no direct operations, its ability to pay distributions depends, in part, on the ability of its subsidiaries to generate income to pay dividends. Penn-Patriot Insurance Company and its insurance subsidiaries are subject to significant regulatory restrictions limiting their ability to declare and pay dividends. Global Indemnity Investments, Inc. is dependent on generating investment income in order to pay a dividend to Global Indemnity Group, LLC. See Note 22 for additional information regarding dividend limitations imposed on Penn-Patriot Insurance Company and its subsidiaries.

Dividend / Distribution Program

During the fourth quarter of 2017, Global Indemnity announced the adoption of a dividend / distribution program. Although subject to the absolute discretion of the Board of Directors and factors, conditions, and prospects as such may exist from time to time when the Board of Directors considers the advisability of declaring a quarterly dividend / distribution, Global Indemnity Group, LLC currently anticipates a distribution rate of $0.25 per share per quarter ($1.00 per share per year).

 

Dividends/ Distributions

Distribution payments of $0.25 per common share per quarter were declared during the year ended December 31, 2022 as follows:

 

Approval Date

 

Record Date

 

Payment Date

 

Total Distributions Declared
(Dollars in thousands)

 

March 3, 2022

 

March 21, 2022

 

March 31, 2022

 

$

3,597

 

June 2, 2022

 

June 20, 2022

 

June 30, 2022

 

 

3,602

 

September 23, 2022

 

October 4, 2022

 

October 11, 2022

 

 

3,616

 

December 8, 2022

 

December 23, 2022

 

December 30, 2022

 

 

3,389

 

Various (1)

 

Various

 

Various

 

 

339

 

Total

 

 

 

 

 

$

14,543

 

 

(1)
Represents distributions declared on unvested shares, net of forfeitures

 

Distribution payments of $0.25 per common share per quarter were declared during the year ended December 31, 2021 as follows:

 

Approval Date

 

Record Date

 

Payment Date

 

Total Distributions Declared
(Dollars in thousands)

 

February 14, 2021

 

March 22, 2021

 

March 31, 2021

 

$

3,570

 

June 5, 2021

 

June 21, 2021

 

June 30, 2021

 

 

3,579

 

September 11, 2021

 

September 23, 2021

 

September 30, 2021

 

 

3,583

 

December 4, 2021

 

December 20, 2021

 

December 31, 2021

 

 

3,587

 

Various (1)

 

Various

 

Various

 

 

259

 

Total

 

 

 

 

 

$

14,578

 

 

(1)
Represents distributions declared on unvested shares, net of forfeitures

Dividend / Distribution payments of $0.25 per common share per quarter were declared during the year ended December 31, 2020 as follows:

 

Approval Date

 

Record Date

 

Payment Date

 

Total Dividends / Distributions Declared
(Dollars in thousands)

 

February 9, 2020 (1)

 

March 24, 2020

 

March 31, 2020

 

$

3,539

 

June 7, 2020 (1)

 

June 23, 2020

 

June 30, 2020

 

 

3,545

 

September 13, 2020 (2)

 

September 25, 2020

 

September 30, 2020

 

 

3,552

 

December 6, 2020 (2)

 

December 24, 2020

 

December 31, 2020

 

 

3,558

 

Various (3)

 

Various

 

Various

 

 

451

 

Total

 

 

 

 

 

$

14,645

 

 

(1)
Represents dividends payments
(2)
Represents distribution / return of capital payments
(3)
Represents dividends / distributions declared on unvested shares, net of forfeitures

 

In addition, distributions of $0.4 million, $0.4 million, and $0.1 million were paid to Global Indemnity Group, LLC’s preferred shareholder during each of the years ended December 31, 2022, 2021, and 2020, respectively.

As of December 31, 2022 and 2021, accrued distributions on unvested common shares, which were included in other liabilities on the consolidated balance sheets, were $1.1 million and $0.9 million, respectively. Accrued preferred distributions were less than $0.1 million as of December 31, 2022 and 2021 and were also included in other liabilities on the consolidated balance sheets.

Repurchases and Redemptions of Global Indemnity Group, LLC’s Common Shares

Global Indemnity Group, LLC allows employees to surrender class A common shares as payment for the tax liability incurred upon the vesting of restricted stock that was issued under the Company’s share incentive plan in effect at the time of issuance. During 2022, 2021, and 2020, Global Indemnity purchased an aggregate of 15,954, 17,318 and 5,120, respectively, of surrendered class A common shares from its employees for $0.4 million, $0.5 million, and $0.2 million, respectively.

On October 21, 2022, GBLI announced that it would commence a stock repurchase program beginning in the fourth quarter of 2022. Repurchases of up to $32 million of Global Indemnity Group, LLC’s currently outstanding class A common shares have been authorized by Global Indemnity Group, LLC’s Board of Directors. On January 3, 2023, the Company announced that it increased the stock repurchase authorization to $60 million. The authorization to repurchase will expire on December 31, 2027. The timing and actual number of shares repurchased, if any, will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

Under the repurchase program, repurchases may be made from time to time using a variety of methods, including open market purchases or privately negotiated transactions, all in compliance with Global Indemnity Group, LLC’s Insider Trading Policy, the United States Securities and Exchange Commission, and other applicable legal requirements. The repurchase program does not obligate Global Indemnity Group, LLC to acquire any particular amount of class A common shares, and the repurchase program may be suspended or discontinued at any time at Global Indemnity Group, LLC’s discretion.

During 2022, Global Indemnity repurchased 907,082 shares from third parties under this repurchase program for an aggregate amount of $21.9 million or $24.17 per share. Of these shares repurchased, one of the Directors of Global Indemnity Group, LLC purchased 138,151 shares for $24.17 per share in December 31, 2022. As a result of these transactions, book value per share increased by $1.09 per share.

Shares purchased from employees or third parties by Global Indemnity Group, LLC are held as treasury stock and recorded at cost until formally retired by Global Indemnity Group, LLC.

The following table provides information with respect to the class A common shares that were surrendered, repurchased, or redeemed in 2022:

 

Period (1)

 

Total Number
of Shares
Purchased or
Redeemed

 

 

Average
Price Paid
Per Share

 

 

Total Number of Shares
Purchased as Part of
Publicly Announced
Plan or Program

 

 

Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Plans or Programs (2)

 

Class A common shares:

 

 

 

 

 

 

 

 

 

 

 

 

January 1-31, 2022

 

 

4,781

 

(3)

$

25.13

 

 

 

—

 

 

 

—

 

June 1-30, 2022

 

 

11,173

 

(3)

$

26.28

 

 

 

—

 

 

 

—

 

October 1-31, 2022

 

 

200,000

 

(4)

$

23.49

 

 

 

200,000

 

 

 

27,302,000

 

November 1-30, 2022

 

 

250,000

 

(4)

$

24.50

 

 

 

250,000

 

 

 

21,177,000

 

December 1-31, 2022

 

 

457,082

 

(4)

$

24.28

 

 

 

457,082

 

 

 

10,079,066

 

Total

 

 

923,036

 

 

$

24.20

 

 

 

907,082

 

 

 

 

 

(1)
Based on settlement date.
(2)
Based on the $32 million share repurchase authorization announced on October 21, 2022.
(3)
Surrendered by employees as payment of taxes withheld on the vesting of restricted stock.
(4)
Purchased as part of the repurchase program announced in October 2022.

The following table provides information with respect to the class A common shares that were surrendered, repurchased, or redeemed in 2021:

 

Period (1)

 

Total Number
of Shares
Purchased or
Redeemed

 

 

Average
Price Paid
Per Share

 

 

Total Number of Shares
Purchased as Part of
Publicly Announced
Plan or Program

 

 

Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Plans or Programs

 

Class A common shares:

 

 

 

 

 

 

 

 

 

 

 

 

January 1-31, 2021

 

 

6,720

 

(2)

$

28.59

 

 

 

—

 

 

 

—

 

March 1-31, 2021

 

 

3,095

 

(2)

$

29.40

 

 

 

—

 

 

 

—

 

June 1-30, 2021

 

 

7,100

 

(2)

$

27.64

 

 

 

—

 

 

 

—

 

November 1-30, 2021

 

 

403

 

(2)

$

26.80

 

 

 

—

 

 

 

—

 

Total

 

 

17,318

 

 

$

28.30

 

 

 

—

 

 

 

 

 

(1)
Based on settlement date.
(2)
Surrendered by employees as payment of taxes withheld on the vesting of restricted stock.

 

Global Indemnity Group, LLC converted 153,594 and 186,160 of class B common shares to class A common shares on November 14, 2022 and April 5, 2021, respectively. There were no other class B common shares that were surrendered, repurchased, or redeemed in 2022 or 2021.

Each class A common share has one vote and each class B common share has ten votes.

As of December 31, 2022, Global Indemnity Group, LLC’s class A common shares were held by approximately 150 shareholders of record. The Fox Paine Entities comprise the two holders of record of Global Indemnity Group, LLC’s class B common shares as of December 31, 2022. Global Indemnity Group, LLC’s preferred shares were held by 1 holder of record, an affiliate of Fox Paine & Company, LLC, as of December 31, 2022.