Ormond, et al. v. Anthem, Inc., et al.
Berger Montague, together with co-counsel, prosecuted this class action against Anthem, Inc. (now known as WellPoint, Inc.) and Anthem Insurance Companies, Inc., in the United States District Court for the Southern District of Indiana (Ormond, et al. v. Anthem, Inc., et al., Case No. 1:05-cv-01908) on behalf of approximately 705,000 class members, each of whom was a former policyholder-member of Anthem Insurance Companies, a health benefits mutual insurer.
The litigation arose out of the conversion of Anthem Insurance Companies from a mutual insurer to a publicly-owned stock insurance company in November 2001 (a process known as “demutualization”), and the related initial public offering (“IPO”) of stock in its parent, Anthem, Inc. The plaintiffs, all of whom received cash compensation from the IPO in exchange for the extinguishment of their owner-membership interests in the converted mutual company, claimed that they should have received a greater amount of cash; and in particular, that defendants had breached their fiduciary duties and were negligent in setting the price of the IPO shares, which price determined the amount of cash received by the policyholder-members.
At the time, the proposed conversion by Anthem Insurance Companies was a historic event in the insurance industry – both in Indiana and nationwide – because Anthem Insurance Companies was the fifth-largest health insurance company in the country to demutualize, and the first health insurer in Indiana to convert from a mutual insurance company to a stock insurance company.
The class claims were settled on the eve of trial (which was scheduled to commence on June 18, 2012) for $90 million in cash; and on November 9, 2012, the United States District Court for the Southern District of Indiana entered a final Order approving the settlement.