Cigna’s CEO and Board Sued for ‘Black-Ops-Style’ Tactics to Kill Merger with Anthem

Cigna Corp.’s chief executive officer and board used “black-ops-style” tactics in a covert campaign to “blow up” a $48 billion merger with rival insurer Anthem Inc., Cigna investors claim in a lawsuit.

A Massachusetts-based pension fund alleges that Cigna CEO David Cordani sought to “poison” the deal after failing to secure the top post in the merged company. He hired lawyers and public relations specialists to help in a “Trojan Horse” campaign, the fund claims. The deal, which would have created the largest U.S. health insurer, collapsed in 2017.

“The board supported his sabotage and placed Cordani’s personal interests over the best interests of the company” in order “to protect their jobs at the expense of shareholders,” according to the lawsuit, filed under seal on Nov. 17 in Delaware Chancery Court and made public on Monday.

Representatives of Cigna, based in Bloomfield, Connecticut, and Indianapolis-based Anthem didn’t immediately return emails seeking comment on the suit.

‘Trojan Horse’ Campaign

The Massachusetts Laborers’ Annuity Fund is seeking unspecified damages to be returned to the company on behalf of all Cigna investors. Such derivative lawsuits, as they’re called, typically target directors for failing to properly oversee operations.

The fund claims that Cordani hired the public relations specialist Teneo, which it also names as a defendant, to scuttle the merger while making it look like Cigna was working to consummate it.

“Throughout this litigation, Cigna’s fiduciaries took pains to hide their disloyalty, such as making misleading public statements” and “proffering non-credible testimony,” according to the suit.

Teneo was tasked with making targeted leaks to news media portraying Anthem’s efforts to win antitrust clearance as bumbling, the pension fund alleges. Cordani and board members worked to keep the “Trojan Horse” campaign a secret, according to the complaint.

Representatives of Teneo didn’t immediately return calls and emails seeking comment on the lawsuit.

‘Corporate Soap Opera’

Anthem offered to buy Cigna in 2015 to bulk up and gain negotiating power, lowering reimbursement rates to health care providers. The U.S. Justice Department’s antitrust division sued the following year to block the merger, arguing it would further consolidate an already concentrated market and lead to higher costs for employers and consumers.

The deal’s collapse set off a legal battle between the two insurance giants to collect billions of dollars from each other, providing an inside look at one of the largest busted corporate deals in U.S. history and featuring competing narratives of how the transaction failed.

Read More: Judge’s Denial of Anthem Injunction Effectively Kills Cigna Merger

In a hearing last November, Delaware Chancery Judge Travis Laster urged the companies to end their “corporate soap opera.” In August, he rebuffed both of them, saying Cigna had breached its obligations but that the union was likely to have been blocked on antitrust grounds anyway.

“This outcome leaves the parties where they stand,” he wrote. “Neither side can recover from the other. Each must deal independently with the consequences of their costly and ill-fated attempt to merge.”

Earlier this month, Cigna,

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Covid on Track to Kill 30,000 More in U.S. by Christmas, CDC Model Shows

Travelers At LAX Airport As U.S. Holiday Air Travel Surges

Photographer: Bing Guan/Bloomberg

After a week that shattered daily case, testing and hospitalization records, Covid’s trajectory is slated to steepen in the U.S.

Coronavirus, which has killed more than 256,000 Americans so far, is on track to claim another 30,000 lives by mid-December, according to forecasts from the U.S. Centers for Disease Control and Prevention. The model shows weekly cases and deaths both rising every week for the next month, the maximum range of the agency’s projection.

Covid Trajectory

The virus death toll is projected to climb by 30,000 by mid-December

Source: CDC

Other models stretch further into the future and paint a picture of what the disease may look like when President-elect Joe Biden inherits the crisis. Data from the Institute for Health Metrics and Evaluation at the University of Washington in Seattle show daily deaths peaking in early January on the current path, at around 2,560. That would imply a death toll of more than 387,000 by Inauguration Day, Jan. 20.

The institute’s model suggests that watered-down social distancing mandates would push the peak to early February, at more than 5,600 deaths per day. The university’s forecasts don’t factor in how a vaccine would slow the spread of the virus, though researchers anticipate adding that to their models within the coming weeks.

The uncertainty underscores how much can still change before a vaccine is available. In a trial, a shot developed by the University of Oxford and AstraZeneca Plc prevented an average of 70% of participants from falling ill. Pfizer Inc. and Moderna Inc. saw higher efficacy, though experts are still divided on how long it might be before a vaccine is ready for emergency use.

The U.S. reported an additional 150,098 cases on Sunday, according to Covid Tracking Project data. The data show:

  • North Dakota, Wyoming and Minnesota had the most new cases per million people.
  • The states with the worst momentum are New Mexico, Vermont and Wyoming as measured by the percent change in seven-day average cases from a week earlier.
  • Oregon posted a record case count Sunday.

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