Texas Group Buys Stake in First Executive

A Texas partnership called the Airlie Group told the Securities and Exchange Commission on Friday that it holds a 6.7% stake in First Executive Corp., the Los Angeles-based insurance holding company noted for its investments in high-yield junk bonds.

In its SEC filing, the Airlie Group said it paid about $46.7 million for its stake “for investment purposes.” The holding, it said, includes depositary shares and warrants to buy common stock that together constitute the equivalent of 6.1 million shares of First Executive common stock.

The investment made Airlie the second Texas group to take a position in First Executive. On Thursday, Rosewood Financial Corp. of Dallas, sought regulatory approval to buy up to 49.9% of First Executive’s outstanding shares of common stock. Rosewood, controlled by oil heiress Caroline Rose Hunt, now holds 9.9% of First Executive shares and is negotiating with First Executive and ICH Corp. of Louisville, Ky., the company’s largest shareholder, to buy ICH’s 20% stake.

Permission Needed

However, investors seeking to buy more than 10% of an insurance company must first receive approval from regulators in the states where its subsidiaries are headquartered.

Rosewood must also obtain First Executive’s permission, though, because the two companies entered into a so-called standstill agreement that prohibits ICH from selling its shares without First Executive’s approval. (The agreement also prevents ICH from acquiring more than 25% of First Executive on a hostile basis.)

On Sept. 27, Airlie bought 3 million First Executive depositary shares for $42 million, and 6 million warrants for $4.3 million.

The filing identified only Dort A. Cameron III of Greenwich, Conn., as a member of the investor group, which reportedly includes Texas billionaire investor Robert Bass and Richard Rainwater, a Ft. Worth financier and former Bass associate. They could not be reached Friday for comment.