[Federal Register Volume 60, Number 151 (Monday, August 7, 1995)]
[Notices]
[Pages 40195-40204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19308]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Interstate Bakeries Corp. and Continental Baking
Co.; Proposed Final Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Consent
Judgment, Stipulation, and Competitive Impact Statement have been filed
with the United States District Court for the Northern District of
Illinois, Eastern Division in a civil antitrust case, United States v.
Interstate Bakeries Corp. and Continental Baking Co., Civ. No. 95 C
4194.
On July 20, 1995, the United States filed a Complaint seeking to
enjoin a transaction by which Interstate agreed to acquire Continental.
Continental and Interstate are the country's first and third largest
wholesale commercial bakers and producers of white pan bread (``plain
old white bread''). The Complaint alleged that the proposed acquisition
would substantially lessen competition in the sale of white pan bread
in five markets (Chicago, Milwaukee, central Illinois (Springfield,
Peoria, Champaign/Urbana), San Diego, and Los Angeles) in violation of
section 7 of the Clayton Act, 15 U.S.C. 18.
The proposed Final Judgment requires defendants to divest such
brand names and possibly other assets as are necessary to create a new
competitor in the sale of white pan bread in each of the five markets.
If the required divestitures are not accomplished within nine months,
the Court will appoint a trustee to complete the sales. The Hold
Separate Stipulation and Order is intended to facilitate the
divestitures by requiring defendants to hold separate and maintain
certain products and plans as economically viable assets pending
possible divestiture. A Competitive Impact Statement filed by the
United States describes the Complaint, the proposed Final Judgment, and
remedies available to private litigants.
The public is invited to comment to the Justice Department and to
the Court. Comments should be addressed to Anthony V. Nanni, Chief,
Litigation I Section, U.S. Department of Justice, Antitrust Division,
1401 H Street NW., Room 4000, Washington, DC 20530 (telephone: (202)
307-0207). Comments must be received within sixty days.
Copies of the Complaint, Hold Separate Stipulation and Order,
proposed Final Judgment, and Competitive Impact Statement are available
for inspection in Room 207 of the U.S.Department of Justice, Antitrust
Division, 325 7th Street, NW., Washington, DC 20530 (telephone: (202)
514-2841), and at the office of the Clerk of the United States District
Court for the Northern District of Illinois, Eastern Division, 219 S.
Dearborn, 20th Floor, Chicago, Illinois, 60604. Copies of these
materials may be obtained upon request and payment of a copying fee.
Constance K. Robinson,
Director of Operations.
Civil Action No.: 95C 4194
Filed: 7/20/95
Judge Manning
Hold Separate Stipulation and Order
It is hereby stipulated and agreed by and between the undersigned
parties, subject to approval and entry by the Court, that:
I. Definitions
As used in this Stipulation and Order:
A. ``Associated Assets'' means:
(1) All labels used on White Pan Bread in the Relevant Territories;
[[Page 40196]]
(2) All land, buildings, fixtures, machinery and equipment related
to the plant;
(3) All trucks and other vehicles, depots or warehouses, and thrift
stores utilized by defendants in the distribution of White Pan Bread in
the Relevant Territories; and
(4) All route books, customer lists, and other records used in the
defendants' day-to-distribution of White Pan Bread in the Relevant
Terrorities.
B. ``Label'' means all legal rights associated with a brand's
trademarks, trade names, copyrights, designs, and trade dress, the
brand's trade secrets; the brand's production knowhow, including, but
not limited to, recipes and formulas used to produce bread sold under
the label; and packagaging, marketing and distribution knowhow and
documentation, such as customer lists and route maps, associated with
the brand.
C. ``Continental'' means Continental Baking Company, each division
or subsidiary thereof, and each officer, director, employee, attorney,
agent, successor or assignee, or other person acting for or on behalf
of any of them.
D. ``Interstate'' means Interstate Bakeries Corporation, each
division or subsidiary thereof, and each officer, director, employee,
attorney, agent, successor or assignee, or other person acting for or
on behalf of any of them.
E. ``Interstate's Chicago Plant'' means the Interstate bread
production facility located in Chicago, Illinois and its Associated
Assets.
F. ``Interstate's Southern California Plant'' means the Interstate
bread production facility located in Glendale, California and its
Associated Assets.
G. ``Interstate's Central Illinois Plants'' means the Interstate
bread production facility located in Decatur, Illinois and the
Interstate bread production facility located in Peoria, Illinois and
their Associated Assets.
H. ``Continental's Chicago Plant'' means the Continental bread
production facility located in Hodgkins, Illinois and its Associated
Assets.
I. ``Continental's Southern California Plant'' means the
Continental bread production facility located in Pomona, California and
its Associated Assets.
J. ``Eastern Wisconsin Territory'' means Adams, Brown, Calumet,
Columbia, Dane, Dodge, Door, Fond du Lac, Forest, Florence, Green,
Green Lake, Jefferson, Kenosha, Kewaunee, Langlade, Manitowoc,
Marinette, Marquette, Menominee, Milwaukee, Oconto, Outagamie, Ozaukee,
Portage, Racine, Rock, Shawano, Sheboygan, Walworth, Washington,
Waukesha, Waupaca, Waushara, and Winnebago counties in the state of
Wisconsin.
K. ``Chicago Territory'' means Boone, Cook, DeKalb, Du Page,
Grundy, JoDaviess, Kane, Kankakee, Kendall, Lake, Lee, McHenry, Ogle,
Stephenson, Will, and Winnebago counties in the state of Illinois, and
Lake and Porter counties in the state of Indiana.
L. ``Central Illinois Territory'' means Adams, Bond, Brown, Bureau,
Calhoun, Carroll, Cass, Champaign, Christian, Clark, Clay, Clinton,
Coles, Crawford, Cumberland, De Witt, Douglas, Edgar, Edwards,
Effingham, Fayette, Ford, Fulton, Greene, Hancock, Henderson, Henry,
Iroquois, Jasper, Jersey, Knox, La Salle, Lawrence, Livingston, Logan,
Macon, Macoupin, Madison, Marion, Marshall, Mason, McDonough, McLean,
Menard, Mercer, Montgomery, Morgan, Moultrie, Peoria, Piatt, Pike,
Putnam, Richland, Rock Island, Sangamon, Schuyler, Scott, Shelby,
Stark, Tazewell, Vermilion, Wabash, Warren, Wayne, Whiteside, and
Woodford counties in the state of Illinois.
M. ``Southern California Territory'' means Imperial, Los Angeles,
Orange, Riverside, San Bernadino, and San Diego counties in the state
of California.
N. ``Relevant Territories'' means the Chicago, Eastern Wisconsin,
Southern California, and Central Illinois Territories.
O. ``White Pan Bread'' means white bread baked in a pan but shall
not include hamburger and hot dog buns, or variety breads such as
French bread and Italian bread.
II. Objectives
The Final Judgment filed in this case is meant to ensure
defendants' prompt divestitures for the purpose of establishing viable
competitors in the sale of White Pan Bread to remedy the
anticompetitive effects that the United States alleges would otherwise
result from the acquisition of Continental by Interstate. This Hold
Separate Stipulation and Order ensures, prior to such divestitures,
that certain Interstate and Continental labels, plants and marketing
and sales operations that compete in the Relevant Territories are
maintained as independent, economically viable, ongoing business
concerns, and that competition is maintained during the pendency of the
divestitures.
III. Hold Separate Provisions
Until the divestitures required by the Final Judgment have been
accomplished:
A. Defendants shall preserve, maintain, and continue to operate
Continental's Chicago and Southern California Plants as independent
competitors with management and operations held entirely separate,
distinct and apart from those of Interstate. Defendants shall not
coordinate the production, marketing or terms of sale of Continental's
bread products with Interstate's bread products in the Relevant
Territories. Within thirty (30) days of the entering of this Order,
defendants shall inform plaintiff of steps taken to comply with this
provision.
B. Defendants shall take all steps necessary to ensure that
Interstate's Chicago, Southern California and Central Illinois Plants
and Continental's Chicago and Southern California Plants will be
maintained as economically viable, ongoing business concerns.
Defendants shall use all reasonable efforts to maintain and increase
the sales of Interstate's and Continental's White Pan Bread and other
bread products in the Relevant Territories and otherwise maintain these
businesses as active competitors in the Relevant Territories.
C. Defendants shall provide capital and provide and maintain
sufficient working capital to maintain Interstate's Chicago, Southern
California, and Central Illinois Plants and Continental's Chicago and
Southern California Plants as economically viable, ongoing businesses,
consistent with the requirements of Sections III(A) and (B).
D. Defendants shall not sell, lease, assign, transfer or otherwise
dispose of, or pledge as collateral for loans, assets that may be
required to be divested pursuant to the Final Judgment.
E. Defendants shall preserve the assets that may be required to be
divested pursuant to the Final Judgment in a state of repair equal to
their state of repair as of the date of this Hold Separate Stipulation
and Order, ordinary wear and tear excepted.
F. Defendant shall maintain, in accordance with sound accounting
principles, separate, accurate and complete financial ledgers, books
and records that report on a periodic basis, such as every four weeks
or every month, consistent with past practices, the assets,
liabilities, expenses, revenues and income of Interstate's Chicago,
Southern California and Central Illinois Plants and Continental's
Chicago and Southern California Plants.
G. The production, pricing and promotional plans specific to
Interstate's Chicago, Southern California, or Central Illinois Plants
will not be transferred or otherwise made available to persons having
direct sales or marketing responsibility for Continental's marketing
and sales of
[[Page 40197]]
White Pan Bread in any Relevant Territory; and the production, pricing
and promotional plans specific to Continental's Chicago or Southern
California Plants, or to Continental's marketing and sales of White Pan
Bread in any Relevant Territory, will not be transferred or otherwise
made available to persons having direct sales or marketing
responsibility for Interstate's marketing and sales of White Pan Bread
in any Relevant Territory, unless needed to comply with other
provisions of this Order.
H. Except in the ordinary course of business, or as is otherwise
consistent with the requirements of Sections III(A) and (B), defendants
shall not transfer or terminate, or alter any current employment or
salary agreements for, any executive-level management, sales,
marketing, or engineering personnel of Interstate's Chicago, Southern
California, or Central Illinois Plants or Continental's Chicago or
Southern California Plants.
I. Defendants shall not in anyway inhibit the ability of any
licensee or purchaser under the Final Judgment from hiring any person
currently an employee of defendants' at any plant that may be divested
pursuant to the Final Judgment.
J. Defendants shall take no action that would interfere with the
ability of any trustee appointed pursuant to the Final Judgment to
complete the divesture pursuant to the Final Judgment to a suitable
purchaser or purchasers.
K. This Hold Separate Stipulation and Order shall remain in effect
as to each Relevant Territory pending consummation of the divestitures
contemplated by the proposed Final Judgment as to that Relevant
Territory, or until further Order of the Court.
Respectfully submitted,
Dated:
For Plaintiff United States of America:
Anne K. Bingaman,
Assistant Attorney General.
Arnold C. Celnicker
Lawrence R. Fullerton
Charles R. Schwidde
Charles Biggio
Anthony Harris
Illinois Bar #01133713
Constance K. Robinson
Evangelina Almirantearena
Anthony V. Nanni
Maurice Stucke
Willie L. Hudgins
Attorneys, U.S. Department of Justice Antitrust Division.
James B. Burns,
U.S. Attorney, N.D. Illinois.
For Defendant Interstate Bakeries Corporation
Terry M. Grimm
For Defendant Continental Baking Company
Jay W. Brown
It is so ordered this 20th day of July, 1995.
Blanche M. Manning,
United States District Court Judge.
Stipulation
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the Northern District of Illinois.
2. The parties consent that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedures and Penalties Act (15
U.S.C. 16 (b)-(h)), and without further notice to any party or other
proceedings, provided that plaintiff has not withdrawn its consent,
which it may do at any time before the entry of the proposed Final
Judgment by serving notice thereof on the defendants and by filing that
notice with the Court.
3. The parties shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, and shall,
from the date of the filing of this Stipulation, comply with all the
terms and provisions thereof as though the same were in full force and
effect as an order of the Court.
4. The parties shall abide by and comply with the provisions of the
Hold Separate Stipulation and Order pending entry of the Hold Separate
Stipulation and Order, and shall, from the date of the filing of this
Stipulation, comply with all the terms and provisions thereof as though
the same were in full force and effect as an order of the Court.
5. In the event plaintiff withdraws its consent or if the proposed
Final Judgment is not entered pursuant to this Stipulation, this
Stipulation shall be of no effect whatever and the making of this
Stipulation shall be without prejudice to any party in this or any
other proceeding.
Dated:
Respectfully submitted.
For Plaintiff United States of America
Anne K. Bingaman,
Assistant Attorney General.
Arnold C. Celnicker
Lawrence R. Fullerton
Charles R. Schwidde
Charles Biggio
Anthony Harris
Illinois Bar #01133713
Constance K. Robinson
Evangelina Almirantearena
Anthony V. Nanni
Maurice Stucke
Willie L. Hudgins
Attorneys, U.S. Department of Justice, Antitrust Division.
James B. Burns,
U.S. Attorney, N.D. Illinois.
For Defendant Interstate Bakeries Corporation
Terry M. Grimm
For Defendant Continental Baking Company
Jay W. Brown
So Ordered.
United States District Judge
Final Judgment
WHEREAS, plaintiff, United States of America, having filed its
Complaint herein on July 20, 1995, and plaintiff and defendants, by
their respective attorneys, having consented to the entry of this Final
Judgment without trial or adjudication of any issue of fact or law
herein, and without this Final Judgment constituting any evidence
against or an admission by any party with respect to any issue of law
or fact herein;
AND WHEREAS, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
AND WHEREAS, prompt and certain divestiture of certain rights or
assets and prompt implementation of the Hold Separate Stipulation And
Order to assure that competition is not substantially lessened are the
essence of this agreement;
AND WHEREAS, the parties intend to require defendants to make
certain
[[Page 40198]]
divestitures for the purpose of establishing viable competitors in the
sale of White Pan Bread;
AND WHEREAS, defendants have represented to plaintiff that the
divestitures required below can and will be made and that defendants
will later raise no claims of hardship or difficulty as ground for
asking the Court to modify any of the divestiture provisions contained
below;
NOW, THEREFORE, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby ORDERED, ADJUDGED, AND
DECREED as follows:
I. Jurisdiction
This Court has jurisdiction over each of the parties hereto and the
subject matter of this action. The Complaint states a claim upon which
relief may be granted against the defendants under section 7 of the
Clayton Act, as amended (15 U.S.C. 18).
II. Definitions
As used in this Final Judgment:
A. ``Interstate'' means defendant Interstate Bakeries Corporation,
a Delaware corporation with its headquarters in Kansas City, Missouri,
and includes its successors and assigns, and its subsidiaries,
directors, officers, managers, agents, and employees.
B. ``Continental'' means defendant Continental Baking Company, a
Delaware corporation with its headquarters in St. Louis, Missouri, and
includes its successors and assigns, and its subsidiaries, directors,
officers, managers, agents, and employees.
C. ``Bread Assets'' means:
(1) Either the Mrs. Karl's Label or the Wonder Label for all bread
products except White Pan Bread in the Eastern Wisconsin Territory;
(2) Either the Butternut Label or the Wonder Label for all bread
products except White Pan Bread in the Chicago Territory;
(3) Either the Butternut Label or the Sunbeam Label or the Wonder
Label for all bread products except White Pan Bread in the Central
Illinois Territory;
(4) Either the Weber's Label or the Wonder Label for all bread
products except White Pan Bread in the Southern California Territory;
(5) Either the Interstate plant located in Chicago, Illinois or the
Continental plant located in Hodgkins, Illinois;
(6) Either the Interstate plant located in Glendale, California or
the Continental plant located in Pomona, California;
(7) Either the Interstate plant located in Decatur, Illinois or the
Interstate plant located in Peoria, Illinois;
(8) All land, buildings, fixtures, machinery and equipment related
to the above plants;
(9) All trucks and other vehicles, depots or warehouses, and thrift
stores utilized by defendants in the distribution of bread products
under the Relevant Labels in the Relevant Territories; and
(10) All route books, customer lists, and other records used in the
defendants' day-to-day distribution of bread products under the
Relevant Labels in the Relevant Territories.
D. ``Label'' means all legal rights associated with a brand's
trademarks, trade names, copyrights, designs, and trade dress; the
brand's trade secrets; the brand's production knowhow, including, but
not limited to, recipes and formulas used to produce bread sold under
the brand; and packaging, marketing and distribution know how and
documentation, such as customer lists and route maps, associated with
the brand.
E. ``Eastern Wisconsin Territory'' means Adams, Brown, Calumet,
Columbia, Dane, Dodge, Door, Fond du Lac, Forest, Florence, Green,
Green Lake, Jefferson, Kenosha, Kewaunee, Langlade, Manitowoc,
Marinette, Marquette, Menominee, Milwaukee, Oconto, Outagamie, Ozaukee,
Portage, Racine, Rock, Shawano, Sheboygan, Walworth, Washington,
Waukesha, Waupaca, Waushara, and Winnebago counties in the state of
Wisconsin.
F. ``Chicago Territory'' means Boone, Cook, DeKalb, Du Page,
Grundy, JoDaviess, Kane, Kankakee, Kendall, Lake, Lee, McHenry, Ogle,
Stephenson, Will, and Winnebago counties in the state of Illinois, and
Lake and Porter counties in the state of Indiana.
G. ``Central Illinois Territory'' means Adams, Bond, Brown, Bureau,
Calhoun, Carroll, Cass, Champaign, Christian, Clark, Clay, Clinton,
Coles, Crawford, Cumberland, De Witt, Douglas, Edgar, Edwards,
Effingham, Fayette, Ford, Fulton, Greene, Hancock, Henderson, Henry,
Iroquois, Jasper, Jersey, Knox, La Salle, Lawrence, Livingston, Logan,
Macon, Macoupin, Madison, Marion, Marshall, Mason, McDonough, McLean,
Menard, Mercer, Montgomery, Morgan, Moultrie, Peoria, Piatt, Pike,
Putnam, Richland, Rock Island, Sangamon, Schuyler, Scott, Shelby,
Stark, Tazewell, Vermilion, Wabash, Warren, Wayne, Whiteside, and
Woodford counties in the state of Illinois.
H. ``Southern California Territory'' means Imperial, Los Angeles,
Orange, Riverside, San Bernadino, and San Diego counties in the state
of California.
I. ``Relevant Labels'' means:
(1) Either the Mrs. Karl's Label or the Wonder Label for White Pan
Bread in the Eastern Wisconsin Territory;
(2) Either the Butternut Label or the Wonder Label for White Pan
Bread in the Chicago Territory;
(3) Either the Butternut Label or the Sunbeam Label or the Wonder
Label for White Pan Bread in the Central Illinois Territory; and
(4) Either the Weber's Label or the Wonder Label for White Pan
Bread in the Southern California Territory.
J. ``Relevant Territories'' means the Chicago Territory, the
Eastern Wisconsin Territory, the Central Illinois Territory and the
Southern California Territory.
K. ``White Pan Bread'' means white bread baked in a pan but shall
not include hamburger and hot dog buns, or variety breads such as
French bread and Italian bread.
III. Applicability
A. The provisions of this Final Judgment apply to the defendants,
their successors and assigns, their subsidiaries, directors, officers,
managers, agents, and employees, and all other persons in active
concert or participation with any of them who shall have received
actual notice of this Final Judgment by personal service or otherwise.
B. Defendants shall require, as a condition of the sale or other
disposition of all or substantially all of the Relevant Labels and the
Bread Assets, that the acquiring party or parties agree to be bound by
the provisions of this Final Judgment.
C. Nothing contained in this Final Judgment is or has been created
for the benefit of any third party, and nothing herein shall be
construed to provide any rights to any third party.
D. The provisions of Section IV through VIII of this Final Judgment
shall not be effective until the consummation of the acquisition of
Continental by Interstate.
IV. Divestiture
A. Defendants are hereby ordered and directed, within nine (9)
months of entry of this Final Judgment, to grant to one or more
purchasers a perpetual, royalty-free, assignable, transferable,
exclusive license to use the Relevant Labels to produce (or have
produced for it) and sell White Pan Bread in the Relevant Territories,
together with such Bread Assets as are reasonably necessary in order
for the acquirer of each Relevant Label to sell White Pan Bread under
each respective Relevant Label at a level substantially equivalent to
the average level of White Pan Bread
[[Page 40199]]
sales of each respective Relevant Label in each Relevant Territory over
the preceding year, and otherwise to remain a viable competitor in the
White Pan Bread market in each Relevant Territory. Defendants shall
cease using a Relevant Label within five (5) days of when a purchaser
commences its use.
B. Defendants agree to take all reasonable steps to accomplish
quickly said divestiture. Plaintiff may, in its sole discretion, extend
the time period for divestiture for an additional period of time not to
exceed two months.
C. In accomplishing the divestiture ordered by this Final Judgment,
the defendants promptly shall make known, by usual and customary means,
the availability of the Relevant Labels. The defendants shall provide
any person making an inquiry regarding a possible purchase with a copy
of the Final Judgment. The defendants shall also offer to furnish to
all bona fide prospective purchasers, subject to customary
confidentiality assurances, all reasonably necessary information
regarding the Relevant Labels, except such information subject to
attorney-client privilege or attorney work product privilege.
Defendants shall provide such information to the plaintiff at the same
time that such information is made available to any other person.
Defendants shall permit prospective purchasers of the Relevant Labels
to have access to personnel and to make such inspection of physical
facilities and any and all financial, operational, or other documents
and information as may be relevant to the divestiture required by this
Final Judgment.
D. Unless the plaintiff otherwise consents, divestiture under
Section IV(A), or by the trustee appointed pursuant to Section V, shall
include such Bread Assets and be accomplished in such a way as to
satisfy plaintiff, in its sole discretion, that the Relevant Labels can
and will be used by the purchaser or purchasers as part of viable,
ongoing businesses engaged in the selling of White Pan Bread at
wholesale to retail grocery stores and other customers. Divestiture
shall be made to a purchaser or purchasers for whom it is demonstrated
to plaintiff's satisfaction that (1) the purchase or purchases are for
the purpose of competing effectively in the selling of White Pan Bread
at wholesale to retail grocery stores and other customers; and (2) the
purchaser or purchasers have the managerial, operational, and financial
capability to compete effectively in the selling of White Pan Bread at
wholesale to retail grocery stores and other customers; and (3) none of
the terms of any agreements between the purchaser or purchasers and
defendants give defendants the ability artificially to raise the
purchaser's or purchasers' costs, lower the purchaser's or purchasers'
efficiency, or otherwise interfere in the ability of the purchaser or
purchasers to compete effectively.
V. Appointment of Trustee
A. If defendants have not accomplished the divestiture required by
Section IV within the time specified therein, defendants shall notify
plaintiff of that fact in writing. Within ten (10) calendar days of
that date, plaintiff shall provide defendants with written notice of
the names and qualifications of not more than two (2) nominees for the
position of trustee for the required divestiture. Defendants shall
notify plaintiff within five (5) calendar days thereafter whether
either or both of such nominees are acceptable. If either or both of
such nominees are acceptable to defendants, plaintiff shall notify the
Court of the person upon whom the parties have agreed and the Court
shall appoint that person as the trustee. If neither nominee is
acceptable to defendants, they shall furnish to plaintiff, within ten
(10) calendar days after plaintiff provides the names of its nominees,
written notice of the names and qualifications of not more than two (2)
nominees for the position of trustee for the required divestiture. If
either or both of such nominees are acceptable to plaintiff, plaintiff
shall notify the Court of the person upon whom the parties have agreed
and the Court shall appoint that person as the trustee. If neither
nominee is acceptable to plaintiff, plaintiff shall furnish the Court
the names and qualifications of its and defendants' proposed nominees.
The Court may hear the parties as to the nominees' qualifications and
shall appoint one of the nominees as the trustee.
B. If defendants have not accomplished the divestiture required by
Section IV of this Final Judgment at the expiration of the time period
specified therein, subject to the selection process described in
Section V(A), the appointment by the Court of the trustee shall become
effective. The trustee shall then take steps to effect divestiture as
specified in Section IV(A). The trustee shall have the right, in its
sole discretion, to include in the package of assets to be divested any
or all of the Bread Assets in addition to the Relevant Labels.
C. After the trustee's appointment has become effective, only the
trustee shall have the right to license the Relevant Labels and to sell
the Bread Assets. The trustee shall have the power and authority to
accomplish the divestiture to a purchaser acceptable to plaintiff at
such price and on such terms as are then obtainable upon the best
reasonable effort by the trustee, subject to the provisions of Section
IV of this Final Judgment, and shall have such other powers as this
Court shall deem appropriate. Defendants shall not object to the
licensing of the Relevant Labels or the sale of the Bread Assets by the
trustee on any ground other than the trustee's malfeasance. Any such
objection by defendants must be conveyed in writing to plaintiff and
the trustee within fifteen (15) calendar days after the trustee has
notified defendants of the proposed licensing and sale in accordance
with Section VI of this Final Judgment.
D. The trustee shall serve at the cost and expense of defendants,
shall receive compensation based on a fee arrangement providing an
incentive based on the price and terms of the divestiture and the speed
with which it is accomplished, and shall serve on such other terms and
conditions as the Court may prescribe; provided however, that the
trustee shall receive no compensation, nor incur any costs or expenses,
prior to the effective date of his or her appointment. The trustee
shall account for all monies derived. After approval by the Court of
the trustee's accounting, including fees for its services, all
remaining monies shall be paid to defendants and the trust shall then
be terminated.
E. Defendants shall take no action to interfere with or impede the
trustee's accomplishment of the divestiture of the Relevant Labels or
the Bread Assets and shall use its best efforts to assist the trustee
in accomplishing the required divestiture. The trustee shall have full
and complete access to the personnel, books, records, and facilities of
defendants' overall businesses, and defendants shall develop such
financial or other information necessary to the divestiture of the
Relevant Labels and the Bread Assets.
F. After its appointment becomes effective, the trustee shall file
monthly reports with the parties and the Court setting forth the
trustee's efforts to accomplish divestiture of the Relevant Labels and
the Bread Assets as contemplated under this Final Judgment; provided
however, that to the extent such reports contain information that the
trustee deems confidential, such reports shall not be filed in the
public docket of the Court. Such reports shall include the name,
address, and telephone number of each person who, during the preceding
month, made an offer to acquire, expressed an interest in
[[Page 40200]]
acquiring, entered into negotiations to acquire, or was contracted or
made an inquiry about acquiring, any interest in the Relevant Labels or
the Bread Assets, and shall describe in details each contact with any
such person during that period. The trustee shall maintain full records
of all efforts made to divest these operations.
G. Within six (6) months after its appointment has become
effective, if the trustee has not accomplished the divestiture required
by Section IV of this Final Judgment, the trustee shall promptly file
with the Court a report setting forth (1) the trustee's efforts to
accomplish the required divestiture, (2) the reasons, in the trustee's
judgment, why the required divestiture has not been accomplished, and
(3) the trustee's recommendations; provided however, that to the extent
such reports contain information that the trustee deems confidential,
such reports shall not be filed in the public docket of the Court. The
trustee shall at the same time furnish such reports to the parties, who
shall each have the right to be heard and to make additional
recommendations consistent with the purpose of the trust. The Court
shall thereafter enter such orders as it shall deem appropriate in
order to carry out the purpose of the trust, which shall, if necessary,
include augmenting the assets to be divested, and extending the trust
and the terms of the trustee's appointment.
VI. Notification
Within two (2) calendar days following execution of a contract,
contingent upon compliance with the terms of this Final Judgment, to
effect, in whole or in part, any proposed divestiture pursuant to
Sections IV or V of this Final Judgment, defendants or the trustee,
whichever is then responsible for effecting the divestiture, shall
notify plaintiff of the proposed divestiture. If the trustee is
responsible, it shall similarly notify defendants. The notice shall set
forth the details of the proposed transaction and list the name,
address, and telephone number of each person not previously identified
who offered to, or expressed an interest in or desire to, acquire any
ownership interest in the business that is the subject of the binding
contract, together with full details of same. Within fifteen (15)
calendar days of receipt by plaintiff of such notice, plaintiff may
request additional information concerning the proposed divestiture and
the proposed purchaser. Defendants and the trustee shall furnish any
additional information requested within twenty (20) calendar days of
the receipt of the request, unless the parties shall otherwise agree.
Within thirty (30) calendar days after receipt of the notice or within
twenty (20) calendar days after plaintiff has been provided the
additional information requested (including any additional information
requested of persons other than defendants or the trustee), whichever
is later, plaintiff shall provide written notice to defendants and the
trustee, if there is one, stating whether or not it objects to the
proposed divestiture. If plaintiff provides written notice to
defendants and the trustee that it does not object, then the
divestiture may be consummated, subject only to defendants' limited
right to object to the sale under the provisions in Section V(C).
Absent written notice that the plaintiff does not object to the
proposed purchaser, a divestiture proposed under Section IV shall not
be consummated. Upon objection by plaintiff, a divestiture proposed
under Section IV shall not be consummated. Upon objection by plaintiff,
or by defendants under the proviso in Section V(C), a divestiture
proposed under Section V shall not be consummated unless approved by
the Court.
VII. Affidavits
Within ten (10) calendar days of the filing of this Final Judgment
and every thirty (30) calendar days thereafter until the divestiture
has been completed or authority to effect divestiture passes to the
trustee pursuant to Section V of this Final Judgment, defendants shall
deliver to plaintiff an affidavit as to the fact and manner of
compliance with Sections IV and V of this Final Judgment. Each such
affidavit shall include the name, address, and telephone number of each
person who, at any time after the period covered by the last such
report, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the Relevant Labels or in the
Bread Assets, and shall describe in detail each contact with any such
person during that period. Defendants shall maintain full records of
all efforts made to divest these operations.
VIII. Financing
With prior written consent of the plaintiff, defendants may finance
all or any part of any purchase made pursuant to Sections IV or V of
this Final Judgment.
IX. Preservation of Assets
Until the divestitures required by the Final Judgment have been
accomplished, defendants shall take all steps necessary to comply with
the Hold Separate Stipulation And Order entered by this Court.
Defendants shall take no action that would jeopardize the licensing of
the Relevant Labels or the sale of the Bread Assets.
X. Compliance Inspection
Only for the purpose of determining or securing compliance with the
Final Judgment and subject to any legally recognized privilege, from
time to time:
A. Duly authorized representatives of the Department of Justice,
upon written request of the Attorney General or of the Assistant
Attorney General in charge of the Antitrust Division, and on reasonable
notice to defendants made to its principal office, shall be permitted:
1. Access during office hours of defendants to inspect and copy all
books, ledgers, accounts, correspondence, memoranda, and other records
and documents in the possession or under the control of defendants, who
may have counsel present, relating to enforcement of this Final
Judgment; and
2. Subject to the reasonable convenience of defendants and without
restraint or interference from them, to interview officers, employees,
and agents of defendants, who may have counsel present, regarding any
such matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division made to
defendants' principal office, defendants shall submit such written
reports, under oath if requested, with respect to enforcement of this
Final Judgment.
C. No information or documents obtained by the means provided in
this Section X shall be divulged by a representative of the Department
of Justice to any person other than a duly authorized representative of
the Executive Branch of the United States, except in the course of
legal proceedings to which the United States is a party (including
grand jury proceedings), or for the purpose of security compliance with
this Final Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by
defendants to plaintiff, defendants represent and identify in writing
the material in any such information or documents to which a claim of
protection may be asserted under Rule 26(c)(7) of the Federal Rules of
Civil Procedure, and defendants mark each pertinent page of such
material, ``Subject to claim of protection under Rule 26(c)(7) of the
Federal Rules of Civil Procedure,'' then ten (10) calendar days notice
shall be given by plaintiff to defendants prior to divulging such
material in any legal
[[Page 40201]]
proceeding (other than a grand jury proceeding).
XI. Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any of the parties to this Final Judgment to apply to this Court at any
time for such further orders and directions as may be necessary or
appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XII. Termination
Unless this Court grants an extension, this Final Judgment will
expire on the tenth anniversary of the date its entry.
XIII. Public Interest
Entry of this Final Judgment is in the public Interest.
Dated:-----------------------------------------------------------------
----------------------------------------------------------------------
United States District Judge
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files
this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
The United States filed a civil antitrust Complaint on July 20,
1995, alleging that the proposed acquisition of Continental Baking
Company (``Continental'') by Interstate Bakeries Corporation
(``Interstate'') would violate Section 7 of the Clayton Act, 15 U.S.C.
18. Continental and Interstate are the nation's first and third largest
producers of white pan bread.
The Complaint alleges that the combination of these major
competitors would substantially lessen competition in the production
and sale of white pan bread in five geographic markets: the Chicago
area; the Milwaukee area; central Illinois (i.e., Peoria, Springfield,
Champaign/Urbana); the Los Angeles area and the San Diego area. The
prayer for relief seeks: (1) A judgment that the proposed acquisition
would violate Section 7 of the Clayton Act; and (2) a permanent
injunction preventing Interstate from acquiring control of
Continental's assets or otherwise combining them with its own business
in these five geographic markets.
At the same time that the suit was filed, a proposed settlement was
filed that would permit Interstate to complete its acquisition of
Continental's assets in other parts of the country, yet preserve
competition in the markets in which the transaction would raise
significant competitive concerns. Also filed were a Hold Separate
Stipulation and Order, a Stipulation, and a proposed Final Judgment.
The Hold Separate Stipulation and Order would, in essence, require
Interstate to ensure that, until the divestitures mandated by the Final
Judgment have been accomplished, Continental's bread production and
distribution facilities and ancillary assets located in the affected
markets will be held separate and apart from, and operated
independently of, other Interstate assets and businesses. Moreover,
because the Final Judgment may require Interstate to divest either its
or Continental's plants and ancillary assets in these geographic
markets, until the divestitures are accomplished, Interstate must
preserve and maintain both sets of assets as saleable and economically
viable, ongoing concerns.
The proposed Final Judgment orders defendants to divest to one or
more purchasers certain white pan bread labels in each market.
Additional assets to be divested may include bread production and
distribution facilities and ancillary assets currently used by
Interstate or Continental in each market, as may be required by the
purchaser to be able to sell branded white pan bread at levels
substantially equivalent to the levels existing before the acquisition.
Defendants must complete these divestitures within nine months after
entry of the Final Judgment. If they do not, the Court may appoint a
trustee to sell the assets.
The United States, Interstate, and Continental have stipulated that
the proposed Final Judgment may be entered after compliance with the
APPA. Entry of the proposed Final Judgment would terminate this action,
except the Court would retain jurisdiction to construe, modify, or
enforce the provisions of the proposed Final Judgment and to punish
violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
Interstate, based in Kansas City, Missouri, is the third largest
wholesale baker in the United States. In 1994, it reported total sales
of $1.1 billion. Interstate has 14,000 employees, operates 31
commercial bakeries, and transacts business in 39 states.
Continental, a subsidiary of St. Louis-based Ralston Purina
Company, is the nation's largest wholesale baker. In 1994, Continental
reported total sales of $1.95 billion. It employs 22,000 and operates
35 commercial bakeries that service 80% of the nation's population.
On January 8, 1995, Interstate and Continental announced an
agreement by which Interstate would acquire Continental from its
parent, Ralston Purina Corporation, for cash and stock. This $450
million transaction, which would combine Interstate and Continental,
precipitated the government's suit.
B. The White Pan Bread Industry
White pan bread describes the ubiquitous, white, sliced, soft loaf
known to most consumers as ``plain old white bread.'' An American
household staple, white pan bread is sold in the commercial bread aisle
of every grocery store, convenience store, and mass merchandiser. White
pan bread differs significantly in product attributes from other types
of bread, such as variety bread (e.g., wheat, rye or French) and
freshly baked in-store breads, in taste, texture, uses, perceived
nutritional value, keeping qualities, and appeal to various groups of
consumers. These differing attributes give rise to distinct consumer
preferences for each type of bread. Many children, for instance,
strongly prefer to eat white pan bread, and hence, a primary use of
this bread is for sandwiches in school lunches.
Because of its unique appeal and its distinguishing attributes, a
small but significant increase in the price of white pan bread by all
producers would not be rendered unprofitable by consumers substituting
other breads. White pan bread is, therefore, an appropriate product
market in which to assess the competitive effects of the acquisition.
White pan bread is mass produced on high speed production lines by
wholesale commercial bakers,\1\ who package and sell it to retailers
under either their own brand or a private label (i.e., a brand
controlled by a grocery chain or buying cooperative). Though physically
similar to private label, branded white pan bread is perceived by
consumers as fresher, better tasting, and higher quality bread;
consequently, consumers often pay a premium of twice as much or more
for branded white pan bread. Competition in the white pan bread market
takes place on two levels, between different brands of
[[Page 40202]]
white breads and between branded and private label white bread.
\1\ The bread is also made by so-called ``captive'' bakers,
i.e., wholesale commercial bakers which are owned by, and bake bread
exclusively for, a grocery chain or wholesale grocery buying
cooperative.
---------------------------------------------------------------------------
C. Competition Between Interstate and Continental
Interstate and Continental compete directly in producing,
promoting, and selling both private label and branded white pan bread
to grocery retailers, who in turn sell it to consumers. Interstate's
popular Butternut, Sunbeam, Mrs. Karl's and Weber's regional brands and
Continental's powerhouse national Wonder brand are regarded by
consumers as particularly close substitutes, for they are very
comparable in appearance, price, taste, perceived quality and
freshness.
Interstate and Continental recognize the rivalry between their
products in the relevant geographic markets. To avoid losing sales to
the other, each has engaged in extensive promotional, couponing, and
advertising campaigns that reduce the prices charged for their branded
white pan breads to the benefit of consumers. Through these activities,
Interstate and Continental have each operated as a significant
competitive constraint on the other's prices for white pan bread.
D. Anticompetitive Consequences of the Acquisition
The Complaint alleges that Interstate's acquisition of Continental
would remove the competitive constraint and create (or facilitate
Interstate's exercise of) market power (i.e., the ability to increase
process to consumers) in five relevant geographic markets: the Chicago
area; the Milwaukee area; central Illinois (i.e., Peoria, Springfield,
Champaign/Urbana); the Los Angeles area and the San Diego area.
Specifically, the Complaint alleges that the acquisition would
increase concentration significantly in these already highly
concentrated, difficult-to-enter markets.\2\ Post-acquisition,
Interstate would dominate each market. It would control 41% of all
sales of white pan bread in the Chicago market; 33% in the Milwaukee
market; 62% in the central Illinois market; 64% in the Los Angeles
market; and 50% in the San Diego market.
\2\ The Hirfindahl-Hirschman Index (``HHI'') is a widely-used
measure of market concentration. Following the acquisition, the
approximate post-merger HHIs, calculated from 1994 dollar sales,
would be over: 2250 with a change of 766 for Chicago; 1800 with a
change of 548 for Milwaukee; 4000 with a change of 974 for central
Illinois; 4200 with a change of 2035 for Los Angeles; and 2900 with
a change of 1265 for San Diego. Under the Merger Guidelines, the
Antitrust Division is likely to challenge any acquisition that
increases the HHI by 50 points or more in a market in which the
post-merger HHI will exceed 1800 points.
---------------------------------------------------------------------------
The Complaint alleges that Interstate's acquisition of Continental
would likely lead to an increase in prices charged to consumers for
white pan bread. Following the acquisition, Interstate likely would
unilaterally raise the price of its own brands, Continental's Wonder,
or both. Because Interstate and Continental's brands are perceived by
consumers as close substitutes, Interstate could pursue such a pricing
strategy without losing so much in sales to competing white pan bread
brands or to private labels that the price increase would be
unprofitable. Interstate could, for instance, profitably impose a
significant increase in the price of the Wonder white pan bread, since
a substantial portion of any sales lost for that product would be
recaptured by increased sales of Interstate's other brands. Similarly,
Interstate could increase the prices of any one of its other popular
brands of white pan bread, such as Butternut, and much of the sales
lost by that brand would be picked up by Interstate's Wonder white
bread brand.
Since many consumers consider Interstate and Continental brands to
be closer substitutes than most other branded or private label white
breads, the competitive discipline provided by rivals after the
acquisition would be insufficient to prevent Interstate from
significantly increasing the prices now being charged for Interstate
and Continental branded white pan bread. Moreover, in response to
Interstate's price increases, competing bakers would likely increase
their prices of white pan bread.
The Complaint alleges that new entry by other wholesale commercial
bakers, or brand repositioning by existing competitors, in any of the
five adversely affected geographic markets is unlikely to counteract
these anticompetitive effects.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment would preserve competition in the sale
of white pan bread in each of the five relevant geographic markets.
Within nine months after entry of the Final Judgment, defendants will
divest certain white pan bread labels, and other assets if necessary,
to make an economically viable competitor in the sale of white pan
bread in each geographic market. It may well be that all that is
required to accomplish this goal is the sale to an existing wholesale
baker of the exclusive rights to make and sell white pan bread under
either Continental or Interstate's most popular brand. Depending on the
purchasers' requirements, however, effective divestiture could also
require a sale of Interstate or Continental's production and
distribution facilities. Defendants must take all reasonable steps
necessary to accomplish the divestitures, and shall cooperate with the
prospective purchaser or with the trustee. If defendants do not
accomplish the ordered divestitures within that nine-month time period,
the Final Judgment provides that the Court will appoint a trustee to
complete the divestitures.
If a trustee is appointed, the proposed Final Judgment provides
that Interstate will pay all costs and expenses of the trustee. The
trustee's commission will be structured so as to provide an incentive
for the trustee based on the price obtained and the speed with which
divestiture is accomplished. After her appointment becomes effective,
the trustee will file monthly reports with the parties and the Court,
setting forth the trustee's efforts to accomplish divestiture. At the
end of six months, if the divestiture has not been accomplished, the
trustee and the parties will make recommendations to the Court, which
shall enter such orders as appropriate.
The relief sought in the various markets alleged in the Complaint
has been tailored to ensure that consumers of white pan bread will not
experience unreasonably high prices as a consequence of the
acquisition.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. Sec. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.
16(a)), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States and the defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the APPA, provided that the United States has
not withdrawn its consent.
[[Page 40203]]
The APPA conditions entry upon the Court's determination that the
proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person who wishes to comment should do so
within sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register. The United States will
evaluate and respond to the comments. All comments will be given due
consideration by the Department of Justice, which remains free to
withdraw its consent to the proposed Final Judgment at any time prior
to entry. The comments and the response of the United States will be
filed with the Court and published in the Federal Register.
Written comments should be submitted to: Anthony V. Nanni, Chief,
Litigation I Section, Antitrust Division, United States Department of
Justice, 1401 H Street, NW., Suite 4000, Washington, DC 20530. The
proposed Final Judgment provides that the Court retains jurisdiction
over this action, and the parties may apply to the Court for any order
necessary or appropriate for the modification, interpretation, or
enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits of its Complaint against
defendants Interstate and Continental. The United States is satisfied,
however, that the divestiture of the assets and other relief contained
in the Final Judgment will establish viable white pan bread competitors
in the geographic markets that would otherwise be adversely affected by
the acquisition. Thus, the Final Judgment would achieve the relief the
government would have obtained through litigation, but avoids the time,
expense and uncertainty of a full trial on the merits of the
government's Complaint.
VII. Standard of Review Under the APPA for Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty-day comment
period, after which the court shall determine whether entry of the
proposed Final Judgment, ``is in the public interest.'' In making that
determination, the court may consider--
(1) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the
issues at trial.
15 U.S.C. 16(e) (emphasis added). As the D.C. Circuit recently held,
this statute permits a court to consider, among other things, the
relationship between the remedy secured and the specific allegations
set forth in the government's complaint, whether the decree is
sufficiently clear, whether enforcement mechanisms are sufficient, and
whether the decree may positively harm third parties. See United States
v. Microsoft, 1995-1 Trade Cas. (CCH) p 71,027, at____(Slip op. 26)
(D.C. Cir. June 16,. 1995).
In conducting this inquiry, ``the Court is nowhere compelled to go
to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.''\3\ Rather,
\3\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''
determination can be made properly on the basis of the Competitive
Impact Statement and Response to Comments filed pursuant to the
APPA. Although the APPA authorizes the use of additional procedures,
15 U.S.C. 16(f), those procedures are discretionary. A court need
not invoke any of them unless it believes that the comments have
raised significant issues and that further proceedings would aid the
court in resolving those issues. See H.R. Rep. 93-1463, 93rd Cong.
2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 6535,
6538.
Absent a showing of corrupt failure of the government to
discharge its duty, the Court, in making its public interest
finding, should * * * carefully consider the explanations of the
government in the competitive impact statement and its responses to
comments in order to determine whether those explanations are
---------------------------------------------------------------------------
reasonable under the circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas.
para.61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988) quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083
(1981); see also Microsoft, 1995-1 Trade Cas. at ____ (Slip. op. 22).
Precedent requires that
The balancing of competing social and political interests
affected by a proposed antitrust consent decree must be left, in the
first instance, to the discretion of the Attorney General. The
court's role in protecting the public interest is one of insuring
that the government has not breached its duty to the public in
consenting to the decree. The court is required to determine not
whether a particular decree is the one that will best serve society,
but whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\4\
\4\ United States v. Bechtel, 648 F.2d at 666 (citations
omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d
at 463; United States v. National Broadcasting Co., 449 F. Supp.
1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F.
Supp. at 716. See also Microsoft, 1995-1 Trade Cas. at____(Slip op.
23) (whether ``the remedies (obtained in the decree are) so
inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest.' '') (citations omitted).
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' (citations
omitted).''\5\
\5\ United States v. American Tel. and Tel Co., 552 F. Supp.
131, 150 (D.D.C. 1982), aff'd sub nom. Maryland v. United States,
460 U.S. 1001 (1983) quoting United States v. Gillette Co., supra,
406 F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 605 F.
Supp. 619, 622 (W.D. Ky 1985).
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VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: July 21, 1995.
Respectfully submitted,
Arnold C. Celnicker,
Attorney, Antitrust Division, U.S. Department of Justice.
Certificate of Service
I hereby certify that on July 21, 1995, I caused a copy of the
Competitive Impact Statement filed in U.S. v. Interstate Bakeries
Corporation and Continental Baking Company, Civil No. 95 C 4194, to be
served, by first class
[[Page 40204]]
mail, postage prepaid on counsel for defendants Interstate Bakeries
Corporation and Continental Baking Company, respectively: Terry Grimm,
Winston & Strawn, 35 West Wacker Drive, Chicago, IL 60604; and Donald
Hibner, Sheppard, Mullin, Richter & Hampton, 48th Floor, 333 South Hope
Street, Los Angeles, CA 90071-1448.
Dated: July 21, 1995.
Arnold C. Celnicker,
Attorney, U.S. Department of Justice, Antitrust Division.
[FR Doc. 95-19308 Filed 8-4-95; 8:45 am]
BILLING CODE 4410-01-M