SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): November 26, 2003
CHATTEM, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0-5905 62-0156300
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(State of incorporation) (Commission File No.) (IRS Employer
Identification No.)
1715 West 38th Street, Chattanooga, Tennessee 37409
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(Address of principal executive offices, including zip code)
(423) 821-4571
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(Registrant's telephone number, including area code)
Item 5. Other Events and Regulation FD Disclosure.
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Chattem, Inc. Announces Motion to Intervene in Lawsuit Filed by
Interstate Fire & Casualty Company
CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Nov. 26, 2003--Chattem, Inc.
(NASDAQ: CHTT), a leading marketer and manufacturer of branded
consumer products, announced today that Interstate Fire & Casualty
Company ("Interstate") has filed a motion to intervene as a party
plaintiff in the previously disclosed lawsuit filed by Kemper
Indemnity Insurance Company ("Kemper") in the United States District
Court for the Eastern District of Tennessee. Like Kemper, Interstate
seeks to rescind its excess product liability insurance policy issued
to the Company by Interstate (the "Interstate Policy"). The Interstate
Policy provides the Company with $25 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 Interstate Policy is in excess of $73.5 million
of product liability insurance coverage that is available to the
Company from Kemper and two other insurance companies. In its lawsuit,
Kemper seeks to rescind its policy for $50 million of excess coverage
for product liability claims. Coverage under the Kemper policy is in
excess of $23.5 million of product liability coverage available from
two other insurance companies.
The Company has reached agreements with the two insurance
companies providing the first $23.5 million of product liability
coverage that ensures the substantial portion of the coverage under
their policies will be available. Chattem continues to seek a global
settlement of PPA claims and does not believe the Interstate action
will materially affect those efforts.
In the lawsuit, Interstate is seeking to rescind the Interstate
Policy based on allegations that the Company failed to disclose the
preliminary results of the Yale Study during the submission process to
renew the Interstate Policy for coverage for the December 21, 1999 to
May 31, 2001 policy period. In the alternative, Interstate is seeking
a declaratory judgment on certain policy interpretation issues that if
granted would bar or limit coverage for PPA-related claims under the
Interstate Policy. These claims by Interstate are similar to those
previously asserted by Kemper.
The Company believes that the claims made by Interstate in its
lawsuit are without merit. The Company will aggressively defend this
lawsuit and will vigorously pursue its rights under the Interstate
Policy and its available remedies at law against Interstate which may
include, among other things, a counterclaim of bad faith against
Interstate.
For a discussion of the lawsuits pending against the Company
relating to DEXATRIM with PPA and the Company's product liability
insurance coverage, see the Company's filings with the Securities and
Exchange Commission.
This Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, which
contains a safe harbor for forward-looking statements. The Company
relies on this safe harbor in making such disclosures. The statements
are based on management's current beliefs and assumptions about
expectations, estimates, strategies and projections. These statements
are not guarantees of future performance or results and involve risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements.
CONTACT: Chattem Inc.
Alec Taylor, 423-821-2037, ext. 3281
or
Rick Moss, 423-821-2037, ext. 3278
or
Investor Relations:
Tammy Nichols, 423-821-2037, ext. 3209
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
November 26, 2003 CHATTEM, INC.
By:_________________________________
A. Alexander Taylor II
President and Chief Operating Officer