"Various of your representatives have orally suggested to us that an unwaived Insolvency Event has or may have occurred," reads a letter from Tower Group's (TWGP) general counsel to ACP's (AFSI) CFO. An insolvency event could potentially allow ACP to pull out of its merger agreement with Tower.
Tower insists it doesn't think any insolvency event has happened, and is requesting ACP "unequivocally assure Tower in writing of its commitment to close the Merger on the terms and conditions set forth in the merger agreement and affirm that an Insolvency Event has not occurred."
Should ACP fail to do so by 5PM on Monday, Tower will conclude ACP doesn't plan to voluntarily go through with the deal. "Tower reserves all of its rights, positions, and remedies under the merger agreement or otherwise."