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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: EL KABONG!!! who wrote (12028)	8/20/2003 9:15:14 PM
From: StockDung	Respond to of 19428

UPDATE 4-Chattem says insurer suing it over Dexatrim Wed August 13, 2003 04:10 PM ET (Adds Kemper comment paragraph 6, closing stock price) By Jed Seltzer NEW YORK, Aug 13 (Reuters) - Chattem Inc. CHTT.O on Wednesday said it was being sued by its insurer after consumer lawsuits claimed its Dexatrim diet aid contained a chemical that raised the risk of strokes. Chattem said the suit by Kemper Indemnity Insurance Co. to rescind Chattem's liability insurance is without merit. Chattem's shares closed down almost 22 percent. The Chattanooga, Tennessee-based consumer products company also cut its revenue outlook for the third quarter ending this month and said earnings would be at the lower end of its forecast. It cited weak demand, particularly for Dexatrim and painkillers, and disappointing international sales. Chattem said Kemper accused the company of failing to disclose preliminary results of a study showing the dangers of the chemical phenylpropanolamine, known as PPA, which was used in Dexatrim products until 2000. The suit said Chattem failed to disclose the preliminary results of the Yale University study during the submission process to renew the Kemper coverage for December 1999 to May 2001. Kemper declined to comment on the details of the case, but a spokeswoman said the insurance company did not believe the policy covered Chattem's claims. "I can understand where they (Kemper) are coming from if they're saying this is a loaded gun and you didn't tell us about it when we made the insurance agreement," said Chris Ralls, a Maryville, Tennessee, attorney who specializes in insurance law. The study, concluded in 2000, triggered a public health outcry, with consumer groups calling for Chattem and other drugmakers to remove the chemical from decongestants and diet drugs. The FDA eventually asked all makers of consumer products to remove the chemical. Chattem and makers of cough and cold products were exposed to potential liabilities because their products contained PPA. Chattem said the Kemper policy provides it with $50 million of excess coverage for product liability claims, including pending and anticipated lawsuits relating to PPA. It noted that it has $23.5 million in product liability insurance from two other insurers, and another $25 million of coverage on top of the Kemper policy. "Because it's not an FDA-approved product and it's a dietary supplement, there may be some standard where the insurance company can say, 'You do some testing before you represent to us that this is a safe product,'" Ralls said. The company said it expects third-quarter revenue of $59 million to $61 million, down from its previous estimate of $62 million to $64 million, with earnings coming in at the lower end of its prior outlook of 33 cents to 35 cents a share. Shares of Chattem fell $3.62, or 21.9 percent, to close at $12.90 on the Nasdaq.

To: EL KABONG!!! who wrote (12028)	8/20/2003 9:16:15 PM
From: StockDung	Read Replies (3) \| Respond to of 19428

Chattem Sued By Kemper Over $50 Million Policy Chattem Earnings Lower Than Expected posted August 13, 2003 A lawsuit has been filed in Federal Court in Chattanooga against Chattem, Inc. seeking to rescind the excess product liability insurance policy issued to the Company by Kemper. The Kemper Policy provides the Company with $50 million of excess coverage for product liability claims, including those asserted in the lawsuits currently pending and anticipated to be filed against the Company relating to the existence of phenylpropanolamine ("PPA") in DEXATRIM. Coverage under the Kemper Policy is in excess of $23.5 million of product liability insurance coverage that is available to the Company from two other insurance companies. In addition, the Company has $25 million of insurance coverage from another insurance company that is in excess of the Kemper Policy, officials of the Chattanooga-based firm said. In the lawsuit, Kemper is seeking to rescind the Kemper Policy based on allegations that the Company failed to disclose the preliminary results of the Yale Study during the submission process to renew the Kemper Policy for coverage for the December 21, 1999 to May 31, 2001 policy period. In the alternative, Kemper is seeking a declaratory judgment on certain policy interpretation issues that if granted would bar or limit coverage for PPA-related claims under the Kemper Policy. Chattem officials said, "The Company believes that the claims made by Kemper in its lawsuit are without merit. The Company will aggressively defend this lawsuit and will vigorously pursue its rights under the Kemper Policy and its available remedies at law against Kemper which may include, among other things, a counterclaim of bad faith against Kemper." Meanwhile, Chattem announced that it now expects total revenues for the fiscal third quarter to be in the range of $59-61 million, as opposed to the previously announced estimate of $62-64 million. The Company further estimates its earnings per share for the fiscal third quarter will be at the lower end of the previously announced estimate of $.33-.35. The Company's lowered expectations are the result of weaker than expected sales, particularly from DEXATRIM, its topical analgesic brands and its international division, offset in part by continued high margins, balance sheet management and effective cost controls. Officials said the revised estimates for the fiscal third quarter will have a corresponding impact on the Company's previous estimates for the entire 2003 fiscal year. The Company has not made any revisions to its earlier estimates for the fourth quarter of fiscal 2003. The Company anticipates that revisions, if any, for the fourth quarter of fiscal 2003 would be announced in the fiscal third quarter earnings release to be issued on or about September 19, 2003.