Near North Denies Exec Exodus

July 22, 2003

News reports that an exodus of top executives and longtime clients has hampered the impending sale of Chicago-based Near North Insurance Brokerage Inc. are untrue, according to a company spokeswoman.

“While some executives have moved on, Near North maintains a strong employee structure and a loyal client base,” Natalie Rofalikos, a Near North spokeswoman, told Insurance Journal via e-mail. “We have continued to recruit well-known insurance professionals for key positions within the company.”

A Crain’s Chicago Business story cited unnamed sources who claimed that a large number of top executives are leaving Near North—and taking clients—under the strain of the company’s and owner Michael Segal’s upcoming federal trial on racketeering and insurance fraud charges.

Both Rofalikos and a spokeswoman for Segal could not comment on whether the sale of Near North to Frontenac Co. has been endangered, e-mailing the following reply: “As we are currently under confidentiality agreements we are unable to comment at this time. We are optimistic that we will have an announcement in the immediate future.”

Segal spokeswoman Kitty Kurth did not respond by deadline to the claims that many top Near North executives have deserted the company, and Frontenac Co. Managing Partner Rodney Goldstein also did not respond to a voice mail message by press time.

Segal, a Near North accountant and the brokerage itself have been charged with embezzling more than $20 million from a premium trust fund account. The brokerage has said in a statement that as soon as it learned of the misallocation of funds it alerted regulatory authorities and “imbalances were corrected” without any harm to clients before the charges were brought.

Near North parent company Near North National Group earned $120 million in 2002, an 11 percent increase in revenue from the prior year.

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