Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Justice Department acts to comply with Tunney Act procedures in HSR cases, (Apr 21, 2016)
Organizations Mentioned:Leucadia Natl. Corp.
By Jeffrey May, J.D.
Competitive impact statements have recently been filed with the federal district court in Washington, D.C. by the Department of Justice in two enforcement actions alleging Hart-Scott-Rodino (HSR) Act premerger notification violations that were resolved with civil penalty settlements. It had been the government's practice not to follow Tunney Act procedures, including the filing of competitive impact statements, when HSR Act settlements included only civil penalties. However, the court ruled in February that the Justice Department must comply with Tunney Act procedures when seeking court approval of such settlements (U.S. v. Blavatnik, Civil Action No. 1:15-cv-01631; U.S. v. Leucadia National Corp., Case 1:15-cv-01547).
In the Justice Department’s HSR case against billionaire businessman Len Blavatnik, the court denied approval of a proposed final judgment that required Blavatnik to pay a $656,000 civil penalty because the Tunney Act procedures had not been followed. The government unsuccessfully argued that the settlement with Blavatnik was not subject to these procedures because an HSR Act settlement solely for a civil penalty was not a “proposed consent judgment” within the meaning of the Act. Now, the Justice Department has filed a competitive impact statement in the case, pursuant to the Antitrust Procedures and Penalties Act, to enable the court and the public to evaluate the proposed final judgment that would terminate the civil antitrust proceeding.
In an action against holding company Leucadia National Corporation, the government alleged that Leucadia's unreported acquisition of more than 16 million shares of KCG Holdings, Inc. (KCG) voting securities in July 2013 violated the HSR Act. Leucadia agreed to pay a $240,000 civil penalty to settle the charges under a settlement announced in September 2015. At that time, the government moved for immediate entry of the settlement. A competitive impact statement also has been filed in that case to comply with the Tunney Act.
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