M&A Deal Insurer Seeks Reimbursement From Seller, Alleges Fraud

An insurer that covered the $140 million sale of an earth-moving equipment manufacturer to a family office is suing the seller company, alleging it sought to defraud the buyer by inflating the value of its inventory.

Kinperium Industries Inc. overpaid by more than $15 million, resulting in a $12 million payment by Liberty Surplus Insurance Corp. to indemnify the buyer for its losses, the Liberty Mutual Group unit said in a Wednesday complaint filed in Delaware Chancery Court.

The insurance policy at the heart of the dispute typically replaces an escrow in an M&A transaction, letting seller companies off the ...