Chemtura agreement cuts antitrust fines by $7m
Monday, June 15, 2009; Posted: 11:39 AM7 Stocks You Need To Know For Tomorrow -- Free Newsletter
Jun 13, 2009 (Waterbury Republican-American - McClatchy-Tribune Information Services via COMTEX) -- CEMJQ | Quote | Chart | News | PowerRating -- Chemtura Corp. has worked out agreements with both the U.S. and Canadian governments to reduce its remaining antitrust fines by nearly $7 million, according to published reports
Under the agreement, Chemtura, the Middlebury-based specialty chemicals maker that filed for Chapter 11 bankruptcy protection in March, will reduce its fines from $18.5 million to about $11.6 million, according to a report on Law 360, an Internet news wire for business lawyers. The company will pay $10 million of the $16 million it still owes the U.S. government, and about $1.6 million ($1.8 million in Canadian dollars) of the $2.6 million ($2.9 million Canadian) to the Canadian government, the report states.
Chemtura's settlement with the U.S. government, which still must be approved by the U.S. Bankruptcy Court for the Southern District of New York, was also reported by Bloomberg News.
Chemtura will pay the U.S. government in four installments of $2.5 million. The last payment will be due in December 2010. The company will also pay the Canadian government in four installments, due at roughly the same time, according to Law 360.
If the company opts to convert its bankruptcy filing to a Chapter 7 liquidation case, both governments will have a claim for the original amounts they were owed, minus any payments made.
The U.S. fine was originally imposed after Chemtura pleaded guilty in March 2004 to charges of participating in a criminal antitrust conspiracy to suppress and eliminate competition by maintaining and increasing the price of certain rubber chemicals sold in the U.S. and elsewhere between July 1995 and December 2001. The guilty plea required the company to pay a $50 million fine to the U.S. government in six annual installments, beginning in late 2004.
The Canadian government levied a $9 million (Canadian) fine in 2004, after Chemtura pleaded guilty to one count of conspiring to prevent or lessen competition unduly in the production, manufacture and supply of certain rubber chemicals in Canada. That fine was also payable in six annual installments, according to Law 360.
Chemtura and its U.S. subsidiaries filed a voluntary petition seeking Chapter 11 protection on March 18. None of the company's non-U.S. subsidiaries were included in the filings.
The company, which listed assets of $3.06 billion against debt totaling $2.6 billion, said the filings were necessary after a recent drop in orders led to a sharp decline in its liquidity and cash flow.
