American Union Files Lawsuit Against Meridian Insurance Directors
30 August 2000
American Union Insurance Company Files Lawsuit Against Meridian Insurance Group Directors
BLOOMINGTON, Ill.--Aug. 30, 2000--As part of its tender offer for Indianapolis, Indiana, insurer Meridian Insurance Group, Inc. , American Union Insurance Company filed a complaint against Meridian Insurance Group and its directors in the United States District Court for the Southern District of Indiana alleging the defendants' wrongful conduct in connection with Meridian's 1997 vote to "opt in" to the Indiana take-over statutes, and for other breaches of fiduciary duty. The named directors are Ramon L. Humke, Chairman of the Board of MIGI, Chairman of the Board of Meridian Mutual Insurance Company "Meridian Mutual" and President and Chief Operating Officer of Indianapolis Power & Light Company; Norma J. Oman, President and Chief Executive Officer of MIGI and Meridian Mutual, also a director of Meridian Mutual; Joseph D. Barnette, Jr., President and Chief Executive Officer of Bank One, Indiana, N.A.; John T. Hackett, Managing General Partner, CID Equity Partners, L.P. and also a Director of Meridian Mutual; David M. Kirr, President of Kirr, Marbach & Company; James D. Price, First Vice President-Investments, Prudential Securities Incorporated and a Director of Meridian Mutual; Sarah W. Rowland, Chairman of Rowland Design, Inc. and a Director of Meridian Mutual; and Thomas H. Sams, President and Chief Executive Officer of Waldemar Industries, Inc.The complaint filed alleges that Meridian and its directors have represented to the Indiana Secretary of State that, in 1997, Meridian Insurance Group, by way of a majority vote of its shareholders, reversed Meridian Insurance Group's prior election out of the coverage of various Indiana anti-takeover statutes. The complaint contends that, in fact, no such vote of Meridian Insurance Group's shareholders actually occurred or, in the alternative, were it to be determined that such a vote did occur, then the vote was the direct result of incomplete and misleading proxy materials provided by Meridian Insurance Group and its directors to the shareholders of Meridian Insurance Group.
The complaint further alleges that Meridian's directors a substantial number of which are directors of Meridian Mutual have violated their fiduciary duties, and have promoted their own self-interest and entrenchment at the expense of the shareholders of Meridian, and to the detriment of American Union, by way of their response and opposition to American Union and the tender offer.