IAS Park - the company that grew out of a creditors scheme of arrangement after financial woes basically buried Mutual Risk Management - has now split into two separate businesses.

Late last month, IAS and the Park Group - which were separate companies prior to their respective acquisitions by Mutual Risk in 1998 and 1989, and had continued since then as more or less autonomous companies although owned by MRM - parted ways when the latter was bought up by a US holding company.

Both will continue to operate from their existing offices at 44 Church Street. Park's new owner is Dallas-based Apex Insurance Inc., with the sale of the business closing on December 30.

Park founder Paul Scope, who stays on with the company as CEO and chairman, told The Royal Gazette that under the terms of the sale, Park is now a wholly owned subsidiary of Apex, which was set up last year by American insurance veteran Gary Griffith.

Mr. Scope added that the sale price, which was undisclosed, had satisfied any debts that Park had outstanding with MRM senior debt holders. Those creditors - including XL Capital and Bank of America - effectively became the owners of the IAS Park Group after a long-in-the-works scheme of arrangement was approved by the Bermuda Supreme Court and signed off last July.

That arrangement set the course for MRM's service entities to continue carrying on business with a transfer of debt totalling nearly $200 million, into ownership of the company's captive management and insurance brokerage operations. The plan followed MRM all but coming to a standstill in 2002, after it reported losses of close to $110 million for 2001.

MRM's staggering loss sent the company into a near death spiral. After the company announced those results, its stock fell to trading below a dollar and its shares were delisted after ten years on the New York Stock Exchange. The loss also put the company in default of certain credit agreements and over the next few months a string of executives and directors resigned, state insurance regulators took over its US insurance units, and it was faced with numerous legal actions launched by unhappy clients as well as multiple class action lawsuits by disgruntled investors who may never recoup their losses.

Although not willing to discuss the sales price for Park, Mr. Scope said it had been “substantial” and that he was relieved to have come through the MRM restructuring as a prospering, debt-free company. The company, under the restructuring, gained several offices on each side of the Atlantic and now has grown to 105 employees throughout offices in London, Bermuda, New York, Philadelphia, Chicago and San Francisco.

To date, Park - which has $325 million in premium sales - is Apex's only holding although Mr. Scope said more acquisitions were planned. As for the split from IAS, Mr. Scope said it had been “amicable” and he had nothing but praise for the man at the helm of IAS, David Ezekiel.

“It was nothing but a pleasure to work with David,” he said.

Mr. Ezekiel yesterday spoke to both the sale of Park and the future plans of IAS, which could include management taking on ownership of the company. “This move works well for both entities. Park needs its own identity and the flexibility to become part of a wider broker network whereas IAS seeks to reaffirm its position as the leading captive manager that is not owned by any of the large brokers.

“For IAS, this represents yet another step in refocusing the company as the leading independent in the captive management industry, and we are also currently in discussions with a view to gaining a strong management ownership in the business.”

Mr. Ezekiel concluded: “I am confident that early in the new year we will be able to go to our clients, staff and the industry with a clear vision of how IAS will move forward for the long term and it is both an exciting and energising prospect for all of us who have worked hard at the restructuring over the last two years.

“We wish our friends at Park, together with whom we have travelled a tough road over the restructuring period, all the best in their future endeavours. The Park Group in Bermuda, London and the US are a talented group of individuals and I am in no doubt that they will be successful in executing their business plan. Similarly IAS, in Bermuda, Cayman, Vermont, Guernsey, Ireland and Barbados looks to continue its growth pattern of the last two decades.”

Mr. Ezekiel said that IAS had come to an agreement with Park to share office space as well as to provide IT and HR services as required.Apex has said there would be no job cuts made to Park's 105-staff work force and has named Mr. Scope as a company director and member of the board.

The Dallas offices of Apex will reportedly include business strategy and finance personnel who will work with The Park Group throughout their various markets.