Metabolife Settlements Reached
The former Metabolife International Inc. said in a court document filed Wednesday that it had reached agreements to settle the first 21 of hundreds of injury and death lawsuits over its once best-selling ephedra-based dietary supplement.
About $4.7 million of the San Diego-based company’s insurance coverage would pay the claims if approved by a U.S. Bankruptcy Court judge, court documents suggest.
Once a leading seller of herbal weight control and energy-boosting products, Metabolife filed for bankruptcy protection in July 2005 in the face of mounting suits over Metabolife 356. Ephedra, the primary ingredient, is an herb linked to dozens of heart attacks and 155 deaths.
About 400 suits, seeking more than $1 billion in all, were filed before the court-imposed January cut-off. Metabolife stopped selling the supplement in December 2003.
Metabolife -- now known as MII Liquidation Inc. -- sold its remaining products to another company last November for $12 million and is attempting to pay off creditors, including plaintiffs, with those proceeds plus insurance coverage.
MII lawyer Debra Riley said that the estate was engaged in monthly mediation talks and that it hoped to settle all the suits by July. “We’re all working toward the same goal,” she said.
John Thornton, a Santa Ana lawyer representing about 50 plaintiffs, was less sanguine.
“We’re well underway with the process, but I would not call settlement around the corner,” he said.
A hearing on the first batch of deals is set for June 28. The court also could approve an out-of-court procedure for settling claims for payments of less than $350,000, according to court documents and Riley.
