A bitter battle has come to a conclusion at Economical Mutual Insurance, as policyholders voted against replacing the current board of directors Thursday.
Karen Gavan, special committee chair at Economical Mutual says "We're absolutely delighted the Mutual policyholders gave us an overwhelming majority of support."
About 800 policyholders voted at the company's general meeting at Bingemans' Conference Centre Thursday afternoon, with 77 per cent choosing to defeat the motion.
The motion was part of an effort by a small but vocal group of policyholders hoping to replace the board of directors and take the company public. They are being led by V.C. & Co., a shareholders' rights firm.
While Economical Mutual initially resisted the idea of going public, the company now supports and is moving forward with the idea.
However, V.C. & Co. had said it didn't trust the board to carry out the process, and took the insurance company to court, where a judge ruled in favour of holding a vote.
Despite the defeat, Michael Woollcombe of V.C. & Co. says "We will work to hold the board's feet to the fire to follow through and on their commitments, I hope they will do that and we'll see where things are at later this year as we get ready for next year's shareholder meeting."
According to V.C. & Co. there is about $1 billion at stake, which the company would acquire through demutualization and an initial public offering.
That money would be split among about a select group of policyholders, who would each receive about $1 million.
Economical Mutual has not released their estimation of the company's value at this point.
