AETNA: Investment Fund Will Sue Insurer
An investment fund and two other shareholders will sue Aetna, arguing that the managed care plan "tried to protect their own interests" when it refused a $10 billion buy-out proposal, the Hartford Courant reports. The three class action lawsuits were filed about two weeks ago, "just days before Aetna's board rejected an acquisition overture by ING Group and WellPoint Health Networks," and instead voted to split Aetna into two publicly owned companies. One of the plaintiffs, the Rainbow Fund in New York, said it will proceed with litigation in Hartford Superior Court in Connecticut. The remaining two plaintiffs, shareholders George Schore and Eleanor Werbowsky, were unavailable for comment. In court filings, the Rainbow Fund said that Aetna's directors ignored the ING/WellPoint proposal "in order to protect the positions of the current board of directors and the compensation, prestige and perquisites" they enjoy. "Our board has chosen a course of action which we believe will better enhance shareholder value over time, and we do not view these suits as serious matters," Aetna spokesperson Joyce Oberdorf said Monday. But the suit argues that the "loyalties of Aetna's directors are divided," concerning the WellPoint/ING offer and that "they are not and cannot be expected to act in the best interest of Aetna shareholders." As evidence of their argument, the plaintiffs claim "when the $70-a-share overture surfaced, Aetna's stock was trading in the $40 range -- less than half its value last spring." The suit also contends that Aetna's worth should have been evaluated prior to the offer and that independent advisers should have been appointed to negotiate the terms of the deal (Levick, 3/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.