Blackstone, Goldman Sued Over 'Junk Insurance' Co.

Law360, New York (October 21, 2010, 1:56 PM ET) -- The Los Angeles City Attorney’s Office has sued HealthMarkets Inc. and its controlling shareholders Blackstone Group LP and Goldman Sachs Group Inc. for potentially tens of millions of dollars, accusing the medical insurer of misleading consumers into buying "junk insurance" that left policyholders with poor coverage.

The complaint, filed Wednesday in the Superior Court of California in Los Angeles, charged the defendants with violating California’s unfair competition and false advertising laws.

According to the suit, HealthMarkets and two of its subsidiaries — Mega Life and Health...
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