Validus Holdings Ltd. announced that it has filed legal proceedings in the Supreme Court of Bermuda against IPC Holdings Ltd., IPC Ltd. and Max Capital Group Ltd. that challenge the $50 million termination fee and "no-talk" provision contained in the agreement and plan of amalgamation between IPC and Max.

Validus is seeking an injunction to restrain payment of the termination fee and to restrain operation of the "no-talk" provision on the basis that the termination fee is an unlawful penalty under Bermuda law and therefore unenforceable and that entry into the Max amalgamation agreement, where the agreement contained the termination fee and "no-talk" provision, constituted a breach of the directors' fiduciary duties.

If the termination fee was eliminated or reduced, Validus said it would not object to IPC paying the amount by which the termination fee is reduced as a dividend to IPC shareholders.

On March 31, 2009, Validus delivered a binding offer to the Board of Directors of IPC for the amalgamation of Validus and IPC in an exchange of shares with each IPC share being exchanged for 1.2037 Validus shares.

Validus said that its amalgamation offer would provide IPC shareholders with an 18 percent premium based on the closing stock market prices of both companies on March 30, 2009, the last day of unaffected trading prior to the offer.

It added that the amalgamation offer was superior to the Max deal, which it believes would provide IPC's shareholders little or no premium for their shares. In addition, the proposed Max amalgamation would combine IPC with an unprofitable company under the guise of "diversification", and expose IPC's shareholders to Max's investment portfolio of high-risk alternative investments and non-agency asset-backed securities, said Validus.

Validus claimed that after IPC refused to engage in discussions, on April 9, 2009, it filed preliminary proxy materials with the US Securities and Exchange Commission in connection with IPC's Annual General Meeting of shareholders, which urged IPC shareholders to vote against the proposed Max amalgamation.