Judge denies TRO in Acrisure case against former deal partner

A federal judge Wednesday denied Acrisure’s request for a temporary restraining order against the owner of an insurer from which it bought a third-party administrator and affiliated companies for “hundreds of millions.”

Acrisure alleged that Steven F. Herrig, owner of SUNZ Holdings, breached an agreement to continue using the unit as the insurer’s exclusive TPA.

In Acrisure LLC et al v. Steven F. Herrig et al., filed earlier this month in federal court in Grand Rapids, Michigan, the brokerage said it bought the servicing portion of Mr. Herrig’s insurance operations, including TPA Next Level Administrators, in 2021.

SUNZ is a workers compensation insurer based in Bradenton, Florida, for professional employer organizations, staffing agencies and other companies. The insurer and its affiliates offered integrated services to customers “end to end,” the suit says.

Mr. Herrig continued as CEO of two of the acquired companies, earning more than $1 million annually, and signed various restrictive covenants that remain in effect, according to the lawsuit.

“As part of the sale transaction, Herrig, SUNZ, and Acrisure agreed that SUNZ Insurance would continue to operate post-sale just as it had pre-sale: with SUNZ Insurance being served exclusively by the purchased companies … including for claims administration, managing general agency, and other services,” the suit says.

However, shortly after Acrisure paid SUNZ and Mr. Herrig the final earnout payment earlier this year, he resigned and later contracted with a rival TPA, the complaint says.

Acrisure “will lose hundreds of thousands of dollars in fees from that reduction in business alone,” the broker alleged.

Acrisure requested a TRO against Mr. Herrig, but the judge denied the request, saying irreparable damage or injury was unlikely before further court proceedings. He scheduled a hearing for Oct. 20.

SUNZ denies the allegations and “will respond to the complaint in due course,” said Brian Pincket, general counsel for SUNZ.

Acrisure declined to comment.