LAKE FOREST, Ill., Oct. 7 /PRNewswire/ -- Brunswick Corporation announced today that it had reached agreements to settle three pending lawsuits. As a result, the company said it would record a charge to operating earnings estimated at approximately $31.0 million after tax, or $0.33 per diluted share, in the third quarter of 1999. All three complaints followed the allegations contained in an antitrust suit brought in Little Rock, Ark., where, as previously reported, a jury awarded a group of 22 boat builders treble damages totaling $133 million in June 1998. The settlements cover a suit filed by Volvo Penta of the Americas, Inc., Brunswick's principal competitor in the sale of sterndrive engines; a class action suit filed by a former Brunswick boat dealer purporting to represent all marine dealers who purchased from Brunswick MerCruiser sterndrive and inboard engines and boats equipped with such engines; and a class action suit filed by an individual purporting to represent all retail purchasers of boats equipped with MerCruiser sterndrive and inboard engines in 16 states and the District of Columbia. In addition, as part of the settlement with Volvo Penta, the company has entered into a long-term supply agreement to purchase diesel sterndrive and inboard engines from Volvo for use in certain models of boats manufactured by Brunswick. The two class action settlements are subject to approval by the courts. The company said its appeal of the Little Rock verdict is currently pending, and the company anticipates a decision in the next three to six months. While there can be no assurance, the company believes it is likely to prevail on appeal and obtain either a new trial or judgment in its favor. A class action suit seeking to represent all boat builders not represented in the Little Rock case has been stayed on the merits of the claims pending the outcome of the appeal. Headquartered in Lake Forest, Ill., Brunswick is a multinational company serving outdoor and indoor active recreation markets with leading consumer brands including Zebco and Quantum fishing equipment; American Camper and Remington camping gear; Igloo coolers and ice chests; Mongoose and Roadmaster bicycles; Brunswick bowling centers, equipment and consumer products; Brunswick billiards tables; Life Fitness, Hammer Strength and ParaBody fitness equipment; Sea Ray, Bayliner and Maxum pleasure boats; Baja high-performance boats; Boston Whaler and Trophy offshore fishing boats; Mercury and Mariner outboard engines; and Mercury MerCruiser sterndrives and inboard engines. SOURCE Brunswick Corporation
This makes BC about 0 and 20 on business suits. We see they hired a new hit man at BC (legal counselor) recently. Maybe they finally noticed that too. The new hired gun is from the soap industry (that opens up some joke possibilities, but I will pass on them here.)
This quote comes from the BC press release announcing the filing of the Volvo suit (the one they just lost), "Brunswick said the suit is without merit, but noted that it includes essentially the same charges as a suit the company lost last year in federal court in Little Rock, Ark." hmmm????
Note the language in the current press release referring to the Little Rock appeal, "the company believes it is likely to prevail on appeal and obtain either a new trial or judgment in its favor. "
Their releases and annual reports always sound like they are going to win and they always loose. Seems like the new guy at least re-invented the concept of settling. BC is a great company, but we suggest you don't bet on their lawyers. Maybe things will change now.
BRUNSWICK SETTLES 3 ANTITRUST LAWSUITS Chicago Tribune 8 Oct. 1999 By Sallie L. Gaines Brunswick Corp. said Thursday it has settled three of four antitrust lawsuits charging the leading U.S. maker of marine engines with unfairly monopolizing that market. All three of the suits were patterned after one in which a Little Rock, Ark., jury in June 1998 awarded plaintiffs $133 million. That suit remains under appeal, but Lake Forest-based Brunswick clearly wanted to get the newer cases resolved without risking another huge verdict. The last outstanding case, representing independent boatbuilders who claim they were harmed by Brunswick's pricing policies, was filed by the same Minneapolis attorney who represented the plaintiffs in the successful Little Rock case. That attorney, K. Craig Whitefang of law firm Winthrop and Weinstine, says Brunswick has made no effort to settle either of those cases. Brunswick refused to detail terms of the three settlements beyond saying the company will take an after-tax charge of $31 million, or 33 cents a diluted share, in the third quarter. In the third quarter of 1998, Brunswick earned $4.1 million, or 4 cents a diluted share, on sales of $956.5 million. The quarter included a one-time restructuring charge. Thursday, a First Call survey of six analysts estimated Brunswick would earn 52 cents a share in the third quarter of this year. "This is about settling the litigation in a construct where we're still engaged in litigation," said Peter Hamilton, Brunswick senior vice president and chief financial officer, explaining why the company won't disclose details. One of the three settlements involved a suit filed by Volvo Penta of the Americas Inc., Brunswick's principal competitor in the stern-drive engine market. As part of the settlement, Brunswick said it signed a long-term contract to buy diesel engines from Volvo Penta. That agreement will have no impact on operations of Brunswick's Mercury Marine unit, Hamilton said. "Brunswick doesn't make diesel engines," he noted. Hamilton said the Volvo Penta engines will be used in some models of Sea Ray and Bayliner boats; Brunswick owns both those brands. Other Brunswick boat brands include Boston Whaler, Trophy, Baja and Maxum. The second case settled was filed on behalf of people in 16 states and the District of Columbia who purchased boats equipped with Brunswick's MerCruiser brand engines. The third case was a class-action suit on behalf of marine dealers who bought MerCruiser engines or boats equipped with those engines. All the suits contend that Brunswick has used "predatory pricing" of its engines in an attempt to drive competitors out of business. The Little Rock lawsuit was filed by Independent Boat Builders Inc. and 22 of its members. The last suit outstanding, filed in Minnesota, is on behalf of independent boat manufacturers not covered in the Little Rock case. Those lawsuits charge that Brunswick sells its Mercury brand engines to its own boat divisions at prices cheaper than to outside builders. The suits say that Brunswick requires boatbuilders it doesn't own to commit to buying an unrealistically high number of engines to get the best prices. Brunswick has consistently denied the charges and predicted that its appeal of the Little Rock verdict will result in a reversal or a new trial. Hamilton said a decision in that appeal could come as early as year-end, but likely not until the first quarter of 2000. He would not discuss whether Brunswick had attempted to negotiate a settlement with the 22 dealers in that case or the subsequent lawsuit by other manufacturers. Brunswick shares closed at $24.25, down 37 cents, on the New York Stock Exchange.
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