MetLife Settles Demutualization Suits

The class actions claimed that MetLife violated federal securities laws by making significant omissions and misleading statements in materials sent to policyholders to win their support for the conversion.

Under terms of the agreement, attorneys' costs and fees are to be included in the $50 million. As much as $20 million could be awarded to attorneys for the plaintiffs–Stamell & Schager, New York in the federal action and Lovell, Stewart & Halebian, New York, in the state suit, according to court papers.

The $50 million settlement will also include a $2.5 million donation from MetLife to nonprofit organizations selected with court approval.

The two courts are scheduled to hold a joint hearing on the proposed settlement Dec. 30.

"MetLife is pleased to put these matters behind us, and we believe that the settlement is in the best interest of the company and its policyholders and shareholders," MetLife says in a statement. "MetLife's demutualization in 2000 greatly benefited its more than 11 million policyholders and led to the financial strength MetLife enjoys today. We continue to believe that MetLife had strong defenses to the claims, but we settled the matter to end what had been almost a decade of litigation."