Barbados insured sue Manulife for share of demutualizationBy Alain Thériault | April 17 2012 04:02PM
Ten years of effort by policyholders residing in Barbados has culminated in a trial before the Ontario Superior Court in Toronto to seek approval for a class action suit against Manulife Financial. The 8048 plaintiffs want a share of the benefits the insurer awarded to its eligible policyholders during its demutualization in 1999.The lawsuit alleges that the plaintiffs are entitled to compensation equivalent to that paid to the 750,000 eligible policyholders, even though Manulife had sold its Caribbean operations to Life of Barbados three years before it went public. In the documents filed in court, the attorneys from the firm Sutts, Strosberg pointed out that the insurer recognizes the members of the suit as holders of its policies but refutes the rest of the claim.
The plaintiffs allege that the insurer did not solicit their consent before selling the company to Life of Barbados on Dec. 31, 1996. They accuse it of failing to mention that this transaction would deprive them of their rights to the common shares that Manulife would later issue to its eligible policyholders during demutualization.
They also contend that the Manulife executives, including Dominic D’Alessandro, his CFO Peter Rubenovitch and current CEO Donald Guloien omitted to provide the Barbadian authorities with other details before concluding the transaction with Life of Barbados. For example, the documents filed in court allege that the Supervisor of Insurance would not have authorized this transaction had he known that the policyholders held at that time rights equivalent to C$120 million.
The document does not specify the exact amount of claim per holder. NationNews.com, a Barbados-based website, published in its March 6, 2012 edition that the members of the suit are demanding about $10,000 per policyholder. Sutts, Strosberg states in its document that its clients are also demanding payment of compound interest on this amount based on Manulife’s internal rate of return. The plaintiffs are also seeking punitive damages and costs plus taxes. These costs would probably exceed C$3 million, the document says.
On its website for members of the class-action suit, Sutts, Strosberg mentions that the trial commenced on March 5, 2012 and adjourned on March 21, 2012. It will continue on April 10, 2012, before the Ontario Superior Court.
“We believe this suit is without merit and we will vigorously defend ourselves. As this matter is currently before the courts, we will not be providing further comment,” Laurie Lupton, Manulife’s assistant vice president corporate communications and social media, told The Insurance and Investment Journal.