Legal Library: Cases and Proceedings

In 2007, the Commission requested that the Department of Justice file a complaint seeking civil penalties against James D. Dondero for violating the filing requirements of the Hart-Scott-Rodino Pre-Merger Notification Act. A stipulation and proposed final judgment was also filed requiring Dondero, parent of Highland Capital Management, L.P., a hedge fund, to pay $250,000 to settle the charges. According to the Commission, Highland failed to file the appropriate premerger documents in 2003 when it acquired shares of Neighborcare, Inc, then known as Genesis Health Ventures, bringing its holdings above the $50 million filing threshold. Upon realizing the error, a corrective filing was made, and Highland outlined steps to avoid future violations. However, in 2005, Highland reported another such violation involving shares of Motient Corporation.

The Commission intervened in the formation of United Launch Alliance (ULA), a proposed joint venture between the Boeing Corp. and Lockheed Martin Corp. The FTC’s complaint alleged that the formation of ULA as originally structured would have reduced competition in the markets for U.S. government medium to heavy launch services and space vehicles. In settling the Commissions’ charges, the parties agreed to take certain actions (such as nondiscrimination requirements and firewalls) to address ancillary competitive harms not inextricably tied to the national security benefits of ULA.

The consent order settled charges that Thermo Electron Corporation’s proposed $12.8 billion acquisition of Fisher Scientific International, Inc. would harm competition in the U.S. market for high-performance centrifugal vacuum evaporators (CVEs). Thermo and Fisher are the only two significant suppliers of high-performance CVEs in the United States and the proposed transaction would eliminate the direct price, service, and innovation competition that exists between them. To settle the Commission’s charges, Thermo is required to divest Fisher’s Genevac division, which includes Fisher’s entire CVE business, within five months of the date the consent agreement was signed.

The consent order settled charges that General Dynamics’ proposed $275 million acquisition of SNC Technologies, Inc. and SNC Technologies, Corp. would likely undermine competition by bringing together two of only three competitors providing the U.S. military with melt-pour load, assemble, and pack (LAP) services used during the manufacture of ammunition for mortars and artillery. Absent relief, the proposed acquisition would likely force the U.S. military to pay higher prices for these munitions. General Dynamics is required to sell its interest in American Ordnance to an FTC-approved buyer within four months of acquiring SNC.

A consent order settled charges that Watson Pharmaceuticals, Inc.’s proposed $1.9 billion acquisition of Andrx Corporation, would have likely led to competitive problems in the markets for 13 generic drug products. Watson was required to end its marketing agreements with Interpham Holdings, divest Andrx’s right to develop, make, and market generic extended release tablets that correct the effects of type 2 diabetes, and divest Andrx’s rights and assets related to the developing and marketing of 11 generic oral contraceptives.

There is a related federal proceeding and two related administrative proceedings:

• Watson Pharmaceuticals / Actavis Inc.
• Watson Pharmaceuticals, Inc., a corporation, and Robin Hood Holdings Limited, a limited liability company