FOR IMMEDIATE RELEASE
Investor Contact: Helen M. Wilson
(441) 299-9283
Media Contact: Wendy Davis Johnson
(441) 299-9347
ACE Limited Files Lawsuit Against CIGNA
HAMILTON, Bermuda - December 13, 2000 -- ACE Limited (NYSE: ACL)
announced today that it has initiated legal action against CIGNA Corporation for
breach of contract arising from ACE's $3.45 billion acquisition of CIGNA's
property and casualty business. That acquisition closed on July 2, 1999.
The complaint charges that CIGNA breached its obligations under
the Acquisition Agreement on two issues. ACE's contentions are that CIGNA
has withheld $48 million that ACE is entitled to under the Tax Sharing
Agreement that was a part of the Acquisition Agreement; and that the
financial statements, which CIGNA provided, failed to fairly represent the
financial condition of the acquired companies. ACE is seeking total
compensatory damages of approximately $218 million. The lawsuit was filed
in the United States District Court (Southern District of New York) where
ACE is seeking a jury trial.
ACE confirms that the financial statement impact of the items
under dispute have been reflected in its consolidated financial statements
prior to September 30, 2000. The financial statement impact included
adjustments to goodwill and other balance sheet items and was determined
without including any amounts to be recovered from CIGNA as a result of the
lawsuit. Accordingly, the financial results for the quarter ended
December 31, 2000 will not be impacted by the items included
in the lawsuit.
The ACE Group of Companies provides insurance and reinsurance for
a diverse group of clients. The ACE Group conducts its business on a global
basis with operating subsidiaries in nearly 50 countries. Additional
information can be found at: www.acelimited.com.
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