Superior’s BIG Deal Not Settled
By Robert Warne - November 24, 2003 Superior National may have been fiscally treading water in 1998 when it purchased Business Insurance Group (BIG) from Health Net, but instead of providing any financial buoyancy, Superior’s creditors accuse Health Net of throwing them a dead weight that eventually sunk the carrier.
On Oct. 22, Health Net was on the verge of washing its hands of a long standing dispute over its 1998 sale of BIG to Superior National when Capital Z Financial Services Funds (Capitol Z) came out of the woodwork in opposition to the deal.
The settlement that was reached with the Superior National Trust was for $137 million even though Superior had originally sought up to $400 million in compensatory damages.
Capitol Z, which financed approximately 70 percent of the $285 million price tag for BIG doesn’t want Health Net to get off that easy, so it filed it’s own suit Oct. 28 in state court in New York.
"We intend to oppose Superior's so-called settlement in court as well as seek to replace the trust's oversight committee with truly independent fiduciaries while vigorously prosecuting our separate, independent claims against Health Net," said David Rosner, a lawyer for Capital Z, Bloomberg News reported.
Capitol Z’s charges against Health Net are similar to Superior’s original charges, which include accusations that Health Net knew BIG was on the brink of bankruptcy before it was pawned off to Superior National.
In its SEC 10-Q filing Nov. 14, Health Net reported that it intended to defend itself vigorously in the matter.
March marks the four-year anniversary since the California Department of Insurance moved in and seized Superior National’s California subsidiaries, including BIG.
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