Liberty Completes Golden Eagle Purchase

Liberty Mutual Equity Co. said it completed its purchase of Golden Eagle Insurance Co., ending a legal battle with rival American International Group Inc. for the financially troubled writer of workers’ compensation insurance. Boston-based Liberty Mutual, the biggest U.S. workers’ compensation insurer, said it will use Golden Eagle’s $1.2 billion in assets to give it a leg up in California, the largest state market for such insurance. It renamed the company Golden Eagle Insurance Corp. The purchase, whose price wasn’t disclosed, would make Liberty Mutual second only to a state-run fund in providing compensation insurance to California employers. San Diego-based Golden Eagle was seized by the state Insurance Department in January, after regulators found it lacked $138.5 million in required reserves and that its owner, John C. Mabee, took $69 million in unsecured loans from an affiliate. Regulators said the award of Golden Eagle to New York-based AIG was subject to approval by California Superior Court Judge William Cahill, who ruled that a competing offer from Liberty Mutual was better for the insurer’s policyholders and employees. AIG shares fell $1.25 to close at $97.63 on the New York Stock Exchange.