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This article was originally published in The Rose Sheet

Executive Summary

Interstate Fire & Casualty Company has filed a motion to "intervene as a party plaintiff" in lawsuit against Chattem previously filed in the Tennessee Eastern District Court by Kemper Indemnity Insurance Company, firm announces Nov. 26. Interstate is seeking to rescind $25 mil. of excess product liability insurance it issued to Chattem, while Kemper is attempting to withdraw $50 mil. in coverage. Interstate alleges that Chattem failed to disclose results of a Hemorrhagic Stroke Project study on phenylpropanolamine (PPA), an ingredient linked to strokes that was used in the firm's Dexatrim weight loss products until November 2000. Chattem believes both Interstate and Kemper's claims are "without merit" and vows to "aggressively" defend itself. The Chattanooga, Tenn.-based firm has been named as a defendant in approximately 300 lawsuits alleging injury due to ingestion of PPA-containing products. In May, Chattem settled a PPA suit with a Texas woman for $3 mil. plus $500,000 for certain fees and expenses...

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Chattanooga, Tenn. firm likely will be required to pay $20 mil.-$25 mil. to settle pending lawsuits filed against the company by consumers claiming injury related to ingestion of its Dexatrim weight loss product, which used to contain an ingredient linked to strokes, company reports May 25 during SunTrust Robinson Humphrey Institutional Investor Conference in Atlanta. However, the amount could be lower since the manufacturer of the ingredient may contribute $10 mil. under a proposed settlement. Chattem expects to confirm final settlement payout during the third quarter. As of Dec. 1, Chattem has been named as a defendant in approximately 300 lawsuits alleging injury due to ingestion of Dexatrim ingredient phenylpropanolamine (1"The Rose Sheet" Dec. 1, 2003, In Brief)...

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