Standard Insurance Co. has sued Securian Financial Group, Inc. and its subsidiary, Minnesota Life Insurance Co., over $50 mn in earn-out payments tied to a 2022 acquisition.
The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleges that the acquisition of Minnesota Life’s retirement plan record-keeping business included a provision linking the payments to business retention rates.
The earn-out payments were to be determined 18 months after the transaction closed in December 2022.
Standard claims that as of May 31, the requirements outlined in the master transaction agreement (MTA) were not met. Consequently, it argues Minnesota Life is not entitled to the payments and seeks a declaratory judgment to void the obligations. The lawsuit also requests the court to enforce the original interpretation of the term “lapsed client” as defined in the agreement and to direct an independent accounting firm to act accordingly. Standard is seeking attorneys’ fees and other appropriate relief.
The filing accuses Securian of attempting to bypass the agreed-upon terms to claim the earn-out payments. Standard contends Securian has presented flawed and inconsistent interpretations of the MTA, warranting court intervention.
In October 2022, Standard announced its acquisition of Securian’s retirement record-keeping business. The deal aimed to enhance Standard’s U.S. retirement offerings and boost growth and diversification in the record-keeping segment. It excluded Securian’s pension risk transfer and institutional retirement businesses.
A Standard spokesperson stated, “After attempting in good faith to resolve these matters without litigation, we are confident in our position and look forward to presenting the facts in court.”
Securian spokesperson Jeff Bakken responded, “Securian sold a valuable business to Standard. There is now a dispute over whether Standard has met its post-closing obligations. We disagree with Standard’s claims and will address this matter in court.”
