November 14, 2014

DOJ Obtains $5 Million in Fines & Disgorgement in “Gun-Jumping” Case

Here’s an excerpt from this WilmerHale memo (there’s a bunch of memos on this development in our “Antitrust” Practice Area):

In a stark reminder that the US antitrust agencies continue to take illegal premerger coordination—commonly known as “gun jumping”—very seriously, two producers of medium density fiberboard agreed to pay nearly $5 million in civil penalties and disgorgement for violations of the Hart-Scott-Rodino Act and Section 1 of the Sherman Act. The two defendants, Flakeboard America Limited and SierraPine, allegedly coordinated on the closure of a SierraPine MDF mill during the Department of Justice’s review of the proposed transaction between the companies. The complaint filed on November 7, 2014 and the DOJ’s accompanying papers are significant for other merging parties because they contain descriptions of pre-closing conduct that the DOJ is likely to view as prohibited and conduct that it is likely to view as permitted.