Horizon lines enters plea agreement with DOJ; plans to sell Logistics division
Horizon Lines has entered into a plea agreement with the Antitrust Division of the US Dept of Justice (DOJ). Subject to court approval, Horizon Lines will plead guilty to a charge of violating federal antitrust laws solely with respect to the Puerto Rico trade lane and pay a fine of $45 million. The fine is payable over a five-year period, without interest, as follows: $1 million within 30 days after imposition of the sentence by the court, $1 million on the first anniversary thereafter, $3 million on the second anniversary, $5 million on the third anniversary, $15 million on the fourth anniversary, and $20 million on the fifth anniversary. With the resolution of the DOJ investigation, Horizon Lines is in discussions with certain of its lenders to waive a judgment default that will arise from the plea agreement and to provide financial covenant relief as the company seeks new long-term financing. The plea agreement provides that Horizon Lines will not face additional charges relating to the Puerto Rico trade lane. The DOJ also agreed that the company will not face any charges in connection with the DOJ’s investigation into the Alaska trade, and indicated that the company is not a subject or target of any investigation by the DOJ into the Hawaii and Guam trades. Additionally, the DOJ has agreed that it will not bring criminal charges against any current director or officer, although this agreement does not extend to the company’s current chief executive officer or to the company’s current chief operating officer. Horizon Lines has cooperated with the DOJ since the company became aware of the investigation in April 2008, and has strengthened its corporate compliance and training programs to prevent recurrence of the conduct giving rise to the investigation. Horizon Lines also entered into a Memorandum of Understanding (MOU) on February 22nd with the Commonwealth of Puerto Rico and attorneys representing indirect purchasers, who allege they paid inflated prices for goods imported to Puerto Rico as a result of the alleged price fixing conspiracy. Under the MOU, the company has agreed to pay $1.8 million in exchange for a full release. The settlement agreement, when negotiated and entered into by the parties, will be subject to court approval. The company has also announced its decision to divest its Logistics business, and is in discussions to sell the unit, but can give no assurances that a transaction will take place. Quelle: eyefortransport Portal: www.logistik-express.com |