Metabolife Attempting Settlement of Ephedra Claims

By William Murphy

Published on June 01, 2006

The former San Diego–based company hopes to settle by the end of July hundreds of other still-pending personal injury claims that total more than $1 billion. In June 2005 Metabolife filed for Chapter 11 bankruptcy protection after hundreds of personal injury lawsuits were filed in the wake of findings that Metabolife's ephedra-containing dietary supplements caused often-serious health problems.

Should the proposed settlements be approved, Metabolife will have about $75 million in insurance coverage to settle additional claims. The company wants to settle all claims out of court to avoid the uncertainties of taking cases to trial.

Metabolife is also being sued by creditors through the bankruptcy court's Official Committee for Unsecured Creditors for recompense of $4 million that the creditors allege was diverted into secret accounts by William R. Bradley, one of Metabolife's three owners.

The committee is suing for money spent on Bradley's defense and for punitive damages as well. The lawsuit alleges that Metabolife management and employees should have been aware of and stopped Bradley's actions. Bradley has pleaded guilty to several counts of tax evasion and is presently awaiting sentencing to a federal prison.

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