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Darron Cummings/AP

Last week, a federal judge effectively killed Anthem's proposed $54 billion acquisition of rival health insurer Cigna, ruling that the deal would be anti-competitive. And now it's getting very ugly.

Yesterday, Cigna said not only that it was terminating the deal (Anthem has considered trying to push through), but also that it would sue Anthem for both the reverse termination fee ($1.85 billion) plus more than $13 billion in "additional damages." And, of course, Anthem has counter-sued.

Notes on this merger mess:

  • The merger agreement seems to entitle Cigna to the reverse termination fee, so long as the deal dies for regulatory reasons. It doesn't actually matter which party pulls the trigger.
  • The merger agreement is a bit more ambiguous when it comes to additional damages. In the reverse termination fee section, it says the RTF payment would be Cigna's sole and exclusive financial remedy. Another section, however, appears to allow for uncapped liabilities were Anthem to have willfully breached the merger agreement.
  • Cigna argues the breach relates to Anthem pursuing a "unilateral" merger strategy that "heavily favored the Blue Cross Blue Shield Association" instead of an unspecified "agreed-upon" strategy. The aforementioned judge did say that there was a "fundamental difference of opinion" between the two companies, but this could come down to what was explicitly included in the merger sub and what wasn't.
  • That $13 billion is mostly Cigna's lost premium on the deal, and Delaware courts are very hesitant to award what are known as "expectation damages." One possibility is that Cigna is using the "additional damages" threat as leverage to extract the reverse termination fee before Anthem exhausts all legal remedies to save the merger.
  • For context, Anthem *only* has around $4 billion of cash and short-term equivalents.

Go deeper

Schumer's m(aj)ority checklist

Senate Minority Leader Chuck Schumer. Photo: Tasos Katopodis/Getty Images

Capitalizing on the Georgia runoffs, achieving a 50-50 Senate and launching an impeachment trial are weighty to-dos for getting Joe Biden's administration up and running on Day One.

What to watch: A blend of ceremonies, hearings and legal timelines will come into play on Tuesday and Wednesday so Chuck Schumer can actually claim the Senate majority and propel the new president's agenda.

The dark new reality in Congress

National Guard troops keep watch at security fencing. Photo: Kent Nishimura/Los Angeles Times via Getty Images

This is how bad things are for elected officials and others working in a post-insurrection Congress:

  • Rep. Norma Torres (D-Calif.) said she had a panic attack while grocery shopping back home.
  • Rep. Jim McGovern (D-Mass.) said police may also have to be at his constituent meetings.
  • Rep. Adam Kinzinger (R-Ill.) told a podcaster he brought a gun to his office on Capitol Hill on Jan. 6 because he anticipated trouble with the proceedings that day.
Off the Rails

Episode 3: Descent into madness ... Trump: "Sometimes you need a little crazy"

Photo illustration: Sarah Grillo/Axios. Photos: Tom Williams/CQ-Roll Call, Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 3: The conspiracy goes too far. Trump's outside lawyers plot to seize voting machines and spin theories about communists, spies and computer software.

President Trump was sitting in the Oval Office one day in late November when a call came in from lawyer Sidney Powell. "Ugh, Sidney," he told the staff in the room before he picked up. "She's getting a little crazy, isn't she? She's really gotta tone it down. No one believes this stuff. It's just too much."