The Section 13 claim, however, was a different story. The trial court had dismissed it on the basis that Porch’s allegations related only to the placement of the reinsurance, while the provision in question covered duties after placement. The Fifth Circuit disagreed, finding that Porch had in fact alleged a series of failures by Gallagher that occurred well after the deal was in place. Among them: Gallagher’s failure to recognize the difference between the Yu Po collateral letter and a letter of credit, its misrepresentation of the collateral letter as a letter of credit, its failure to flag red flags throughout the transaction process, its assurances that the collateral was valid, and its assurance that HOA could safely allow Vesttoo’s $25 million withdrawal from the reinsurance account.
