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CONFIDENTIAL

Feb. 18, 2004

Contracts
Breach of Contract
Fraudulent Transfer

Confidential

Settlement –  $132,000,000

Judge

Gary L. Taylor

Court

USDC Central


Attorneys

Plaintiff

A. William Urquhart

William C. Price
(Quinn, Emanuel, Urquhart & Sullivan LLP)

Michael T. Lifrak
(Quinn, Emanuel, Urquhart & Sullivan LLP)

Joel A. Thvedt

Harry A. Olivar Jr.
(Quinn, Emanuel, Urquhart & Sullivan LLP)

Jon C. Cederberg
(Quinn Emanuel Urquhart & Sullivan LLP)


Defendant

Ronald K. Meyer

Christina M. Tchen

Albert L. Hogan

Brad D. Brian
(Munger, Tolles & Olson LLP)

Dennis C. Browne

Mark H. Epstein


Facts

The subject suit was brought in 2000, by the claimant, Superior National Insurance Group, which bought four workers' compensation companies known as Business Insurance Group from the respondent, Foundation Health Corporation (now Health Net Inc.). The settlement was reached shortly before the suit was scheduled to go to trial. The claimant, based in Calabasas, brought claims against the respondent for fraud, securities fraud, fraudulent transfer and breach of contract. The defendants' summary judgment motions as to all claims were denied in August 2003.

Settlement Discussions

PLEASE CAN YOU PROVIDE SOME BRIEF INFO ON THE DEMANDS AND OFFERS PRIOR TO SETTLEMENT AGREEMENT BEING REACH

Damages

The plaintiff sought to undo the $285 million acquisition. The defendant stated that the plaintiff corporation had indicated that its damages could reach $408 million.

Other Information

The settlement proceeds, $132 Million, were paid to SNTL Litigation Trust, a successor-in-interest to the plaintiff, for payment to creditors.


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