Brunswick Settles 3 Suits
7 Oct 1999

Brunswick Reaches Agreements to Settle Three Lawsuits

    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

RBBI comment:

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.


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

    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

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.

Return to Brunswick Page

Return to Recreational Boat Building Industry Home Page