ACE Sues Cigna for Breach of Contract, Seeks $218 Million - TheStreet

ACE Ltd.


filed a breach of contract lawsuit against


(CI) - Get Report

that stems from its acquisition of Cigna's property and casualty business last year.

According to ACE, Cigna misrepresented the financial condition of the acquired businesses and has withheld $48 million that the company should receive under the tax-sharing agreement in the acquisition pact. ACE is seeking compensatory damages of about $218 million.

ACE, which is based in Hamilton, Bermuda, acquired Cigna's property and casualty business for $3.45 billion on July, 2, 1999. ACE filed the suit in the U.S. District Court for the Southern District of New York and is seeking a jury trial.

A spokesman for Cigna said: "It is not unusual in deals of this magnitude for one of the parties to file a claim at or near the deadline. We are confident that our representations of the business were accurate and prepared according to generally accepted accounting principles."

Shares of ACE were down in midday trading, dropping $2.06, or 4.9%, to $39.94. Cigna, which is based in Philadelphia, slipped $2.53, or 2%, to $124.60.