UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
THE MANITOWOC CO., INC., et al.,
Defendants.
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Civil Action 08-01704 (HHK)
Judge: Kennedy, Henry H
Filed: February 17, 2009
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FINAL JUDGMENT
WHEREAS, Plaintiff, the United States of America, filed its Complaint on October 6,
2008, the United States and defendants, The Manitowoc Company, Inc., Enodis plc, and Enodis
Corporation, by their respective attorneys, have consented to the entry of this Final Judgment
without trial or adjudication of any issue of fact or law, and without this Final Judgment
constituting any evidence against or admission by any party regarding any issue of law or fact;
AND WHEREAS, defendants agree to be bound by the provisions of this Final Judgment
pending its approval by the Court;
AND WHEREAS, the essence of this Final Judgment is the prompt and certain
divestiture of certain rights and assets by the defendants to assure that competition is not
substantially lessened;
AND WHEREAS, the United States requires defendants to make certain divestitures for
the purpose of remedying the loss of competition alleged in the Complaint;
AND WHEREAS, defendants have represented to the United States that the divestitures
required below can and will be made, and that defendants will later raise no claim of hardship or
difficulty as grounds for asking the Court to modify any of the divestiture provisions contained
below;
NOW, THEREFORE, before any testimony is taken, without trial or adjudication of any
issue of fact or law, and upon consent of the parties, it is hereby ORDERED, ADJUDGED, AND
DECREED:
I. Jurisdiction
This Court has jurisdiction over the subject matter of and each of the parties to 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:
- "Acquirer" means the entity to whom defendants divest the Divestiture Business.
- "Enodis" means defendant Enodis plc, a corporation registered in England and
Wales with its headquarters in London, England, and Enodis Corporation, a Delaware
corporation with its headquarters in New Port Richey, Florida, and their successors, assigns,
parents, subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and all of their
directors, officers, managers, agents, and employees.
- "Manitowoc" means defendant The Manitowoc Company, Inc., a Wisconsin
corporation headquartered in Manitowoc, Wisconsin, its successors, assigns, parents,
subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and all of their
directors, officers, managers, agents, and employees.
- "Closing Date" means the date on which the transfer of the Divestiture Assets
from the defendants to the Acquirer has been completed.
- "Divestiture Business" means Enodis's entire business engaged in the
development, production, distribution, and sale of ice machines, ice machine parts, and related
equipment (such as ice bins, ice dispensers, and water filtration systems) in the United States,
including, but not limited to:
- Enodis's facility located in Fairfax, South Carolina, which is owned by Scotsman
Group, Inc. (now known as Scotsman Group L.L.C.);
- Enodis's facility located in Vernon Hills, Illinois, which is leased by Scotsman
Group, Inc. (now known as Scotsman Group L.L.C.);
- Enodis's facility located in Denver, Colorado, which is owned by Welbilt
Corporation (now known as Enodis Corporation);
- Enodis's facility located in Pomona, California, which is leased by Scotsman
Group, Inc. (now known as Scotsman Group L.L.C.);
- All tangible assets used in the Divestiture Business, including, but not limited to,
all research and development activities; all manufacturing equipment, tooling and
fixed assets, personal property, inventory, office furniture, materials, supplies, and
other tangible property (including replacement hardware for the Vernon Hills,
Illinois facility that defendants are required to purchase pursuant to Section II,
Paragraph E below); all licenses, permits and authorizations issued by any
governmental organization relating to the Divestiture Business; all contracts,
teaming arrangements, agreements, leases, commitments, certifications, and
understandings relating to the Divestiture Business, including, but not limited to,
supply and distribution agreements; all customer lists, accounts, and credit
records; all repair and performance records and all other records; and
- All intangible assets used in the development, production, distribution, and sale of
ice machines, ice machine parts, and related equipment, including, but not limited
to, all contractual rights (to the extent assignable), except for contracts that are not
primarily for products or services used by the Divestiture Business; all rights
under licenses, permits and authorizations issued by any governmental
organization relating to the Divestiture Business; patents, licenses and
sublicenses, intellectual property, copyrights, trademarks, trade names (including
any use of the name Scotsman or Ice-O-Matic in the United States), service
marks, service names, technical information, computer software and related
documentation (including replacement software and related documentation that
defendants are required to purchase, and applications and data that defendants are
required to transfer to hardware, for the Vernon Hills, Illinois facility pursuant to
Section II, Paragraph E below), know-how, trade secrets, drawings, blueprints,
designs, design protocols, specifications for materials, specifications for parts and
devices, safety procedures for the handling of materials and substances, quality
assurance and control procedures, design tools and simulation capability, all
manuals and technical information defendants provide to their own employees,
customers, suppliers, agents or licensees; and all research data concerning historic
and current research and development efforts (up to the Closing Date of the
divestiture required by Section IV or Section V), including, but not limited to,
designs of experiments, and the results of successful and unsuccessful designs and
experiments;
except that the Divestiture Business shall not include the servers, applications, and related
documentation located at the Vernon Hills, Illinois facility that are not used primarily in the
operation of the Divestiture Business, provided that within 45 days after the filing of the
Complaint in this matter, defendants take all steps necessary (including the purchase of
replacement hardware, the purchase, licensing, or provision of software and related
documentation, and the transfer of applications and data) to ensure that all information
technology operations used by the Divestiture Business are maintained at levels of functionality
equivalent or superior to the levels of functionality that exist as of the filing of the Complaint in
this matter. Defendants shall also take all steps necessary to purge any data related to the
Divestiture Business from hardware and backup media at Vernon Hills that will not be divested
under this provision. The Divestiture Business shall not include the tangible or intangible assets
comprising the Enodis facility in New Port Richey, Florida, with the exception of the following:
(1) any software, electronically stored information, or documents arising from research and
development activities related to the ice machine business; (2) any assets used primarily in the
operation of the ice machine business, or (3) any assets necessary for operation of the ice
machine business.
- "Frimont Business" means Enodis plc's Frimont S.p.A. business, which produces
commercial ice machines for the European market and which the European Commission has
required to be divested.
III. Applicability
- This Final Judgment applies to Manitowoc and Enodis, as defined above, and all
other persons in active concert or participation with any of them who receive actual notice of this
Final Judgment by personal service or otherwise.
- If, prior to complying with Section IV and V of this Final Judgment, defendants
sell or otherwise dispose of all or substantially all of their assets or of lesser business units that
include the Divestiture Business, they shall require the purchaser to be bound by the provisions
of this Final Judgment. Defendants need not obtain such an agreement from the Acquirer of the
assets divested pursuant to this Final Judgment.
IV. Divestitures
- Defendants are ordered and directed, within 150 calendar days after the filing of
the Complaint in this matter, or five (5) calendar days after notice of the entry of this Final
Judgment by the Court, whichever is later, to divest the Divestiture Business in a manner
consistent with this Final Judgment to a single Acquirer acceptable to the United States, in its
sole discretion after consultation with the European Commission. The United States, in its sole
discretion, may agree to one or more extensions of this time period not to exceed sixty (60)
calendar days in total, and shall notify the Court in such circumstances. Defendants agree to use
their best efforts to divest the Divestiture Business as expeditiously as possible.
- In accomplishing the divestiture ordered by this Final Judgment, defendants
promptly shall make known, by usual and customary means, the availability of the Divestiture
Business. Defendants shall inform any person making inquiry regarding a possible purchase of
the Divestiture Business that they are being divested pursuant to this Final Judgment and provide
that person with a copy of this Final Judgment. Defendants shall offer to furnish to all
prospective Acquirers, subject to customary confidentiality assurances, all information and
documents relating to the Divestiture Business customarily provided in a due diligence process
except such information or documents subject to the attorney-client privilege or work-product
doctrine. Defendants shall make available such information to the United States at the same time
that such information is made available to any other person.
- Defendants shall provide the Acquirer and the United States information relating
to all personnel involved in development, production, distribution, and sales related to the
Divestiture Business to enable the Acquirer to make offers of employment. Defendants will not
interfere with any negotiations by the Acquirer to employ any employee whose primary
responsibility is development, production, distribution, and sales related to the Divestiture
Business, and will not interfere with negotiations by the Acquirer to employ the following three
Enodis employees who work at the Vernon Hills, Illinois facility: (1) the Senior Business
Analyst and Developer; (2) the Unix Administrator and Network Manager; and (3) the Computer
Operator and Systems Specialist.
- Defendants shall permit prospective Acquirers of the Divestiture Business to have
reasonable access to personnel and to make inspections of the physical facilities of the
Divestiture Business; access to any and all environmental, zoning, and other permit documents
and information; and access to any and all financial, operational, or other documents and
information customarily provided as part of a due diligence process.
- Defendants shall warrant to the Acquirer that each asset will be operational on the
date of sale.
- Defendants shall not take any action that will impede in any way the permitting,
operation, or divestiture of the Divestiture Business. Defendants shall not exercise any
contractual right to prevent, or otherwise attempt in any way to impede, sales or service
representatives that represent Enodis in connection with the Divestiture Business from
representing the Acquirer in the sale or servicing of products sold by the Divestiture Business.
- Enodis shall warrant to the Acquirer that there are no material defects, and
Manitowoc shall warrant that it is not aware of any material defects, in the environmental, zoning
or other permits pertaining to the operation of each asset, and that following the sale of the
Divestiture Business, defendants will not undertake, directly or indirectly, any challenges to the
environmental, zoning, or other permits relating to the operation of the Divestiture Business.
- Notwithstanding anything to the contrary in this Final Judgment, at the option of
the Acquirer, defendants shall enter into a transition services agreement for a limited period, with
respect to information technology and other support services that are reasonably necessary to
operate the Divestiture Business, with the scope, terms and conditions of such agreement being
subject to the approval of the United States in its sole discretion.
- At the option of the Acquirer, defendants shall use their best efforts to procure the
assignment of contractual rights referenced in Section II, Paragraph E(6) before the Closing Date
of the divestiture required by Section IV or Section V.
- Defendants shall not interfere with any effort by the Acquirer to negotiate a
contract with any supplier of any product purchased by the Divestiture Business as of the filing of
the Complaint in this matter. If requested by the Acquirer:
- Defendants shall provide information or documentation relating to controllers,
compressors, condensers, valves, and copper strips, or any other product
customized for the Divestiture Business by any supplier, that are purchased by the
Divestiture Business under contracts as to which the defendants are unable to
secure effective assignment to the Acquirer or under contracts that are not
primarily for products or services used by the Divestiture Business; and
- If the Acquirer is unable, prior to the Closing Date of the divestiture required by
Section IV or Section V, to negotiate and enter into a contract, on commercially
reasonable terms with a qualified and reliable supplier, providing for the
Acquirer's supply of copper strips, or any other product for which an alternative
supplier is not available as of the Closing Date, that have the same characteristics
(or, so long as the product allows continuation of the Divestiture Business without
disruption, having substantially the same characteristics) and are of the same, or
superior, quality as those purchased by the Divestiture Business as of the filing of
the Complaint in this matter, defendants shall purchase any such product on
behalf of the Acquirer and resell it to the Acquirer at the price specified in
defendants' supply contract as of the date of the purchase of the product for the
Divestiture Business. This obligation shall expire upon the earlier of (1) the
Acquirer or Divestiture Business having negotiated a contract of purchase of any
such product meeting the criteria set forth above, (2) the Acquirer notifying
defendants in writing that the Divestiture Business no longer intends to purchase
any such product under this provision, (3) the expiration of the supply contract in
accordance with the terms of that contract as they existed as of the date of the
filing of the Complaint in this matter, or (4) one year after the date of the
divestiture required under Section IV or Section V. Defendants shall not discuss,
provide, disclose, or otherwise make available, directly or indirectly, any
information related to such purchases and resales to any defendant personnel
involved in production, marketing, distribution, or sales of ice machines.
- Unless the United States otherwise consents in writing, the divestiture pursuant to
Section IV, or by trustee appointed pursuant to Section V, of this Final Judgment, shall include
the entire Divestiture Business, and shall be accomplished in such a way as to satisfy the United
States, in its sole discretion, that the Divestiture Business can and will be used by the Acquirer as
part of a viable, ongoing business engaged in the development, production, distribution, and sale
of commercial cube ice machines, ice machine parts, and related equipment in the United States.
The divestitures, whether pursuant to Section IV or Section V of this Final Judgment,
- shall be made to the acquirer of the Frimont Business;
- shall be made to an Acquirer that, in the United States's sole judgment, has the
intent and capability (including the necessary managerial, operational, technical
and financial capability) of competing effectively in the development, production,
distribution, and sale of commercial cube ice machines, ice machine parts, and
related equipment in the United States; and
- shall be accomplished so as to satisfy the United States, in its sole discretion, that
none of the terms of any agreement between the Acquirer and defendants give
defendants the ability unreasonably to raise the Acquirer's costs, to lower the
Acquirer's efficiency, or otherwise to interfere in the ability of the Acquirer to
compete effectively in the development, production, distribution, and sale of
commercial cube ice machines, ice machine parts, and related equipment in the
United States.
V. Appointment of Trustee
- If defendants have not divested the Divestiture Business within the time period
specified in Section IV, Paragraph A, defendants shall notify the United States of that fact in
writing. Upon application of the United States, the Court shall appoint a trustee selected by the
United States, in consultation with the European Commission to enable selection of a trustee
acceptable to both the United States and the European Commission, and approved by the Court
to effect the divestiture of the Divestiture Business.
- After the appointment of a trustee becomes effective, only the trustee shall have
the right to sell the Divestiture Business. The trustee shall have the power and authority to
accomplish the divestiture to an Acquirer acceptable to the United States at such price and on
such terms as are then obtainable upon reasonable effort by the trustee, subject to the provisions
of Sections IV, V, and VI of this Final Judgment, and shall have such other powers as this Court
deems appropriate. Subject to Section V, Paragraph D of this Final Judgment, the trustee may
hire at the cost and expense of defendants any investment bankers, attorneys, or other agents,
who shall be solely accountable to the trustee, reasonably necessary in the trustee's judgment to
assist in the divestiture.
- Defendants shall not object to a sale by the trustee on any ground other than the
trustee's malfeasance or that the Acquirer has not been approved by the European Commission.
Any objection by defendants on the ground of the trustee's malfeasance must be conveyed in
writing to the United States and the trustee within ten (10) calendar days after the trustee has
provided the notice required under Section VI; any objection by defendants based on lack of
approval from the European Commission must be conveyed in writing to the United States and the trustee within two (2) business days after the European Commission notifies defendants that
it does not approve of the proposed Acquirer.
- The trustee shall serve at the cost and expense of defendants, on such terms and
conditions as the United States approves, and shall account for all monies derived from the sale
of the assets sold by the trustee and all costs and expenses so incurred. After approval by the
Court of the trustee's accounting, including fees for its services and those of any professionals
and agents retained by the trustee, all remaining money shall be paid to defendants and the trust
shall then be terminated. The compensation of the trustee and any professionals and agents
retained by the trustee shall be reasonable in light of the value of the Divestiture Business and
based on a fee arrangement providing the trustee with an incentive based on the price and terms
of the divestiture and the speed with which it is accomplished, but timeliness is paramount.
- Defendants shall use their best efforts to assist the trustee in accomplishing the
required divestiture. The trustee and any consultants, accountants, attorneys, and other persons
retained by the trustee shall have full and complete access to the personnel, books, records, and
facilities of the business to be divested, and defendants shall develop financial and other
information relevant to such business as the trustee may reasonably request, subject to reasonable
protection for trade secret or other confidential research, development, or commercial
information. Defendants shall take no action to interfere with or to impede the trustee's
accomplishment of the divestiture.
- After its appointment, the trustee shall file monthly reports with the United States
and the Court setting forth the trustee's efforts to accomplish the divestiture ordered under this
Final Judgment. 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 acquiring, entered into negotiations to
acquire, or was contacted or made an inquiry about acquiring, any interest in the Divestiture
Business, and shall describe in detail each contact with any such person. The trustee shall
maintain full records of all efforts made to divest the Divestiture Business.
- If the trustee has not accomplished the divestiture ordered under this Final
Judgment within six (6) months after its appointment, 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. 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 report to the United States which shall have the right
to make additional recommendations consistent with the purpose of the trust. The Court
thereafter shall enter such orders as it shall deem appropriate to carry out the purpose of the Final
Judgment, which may, if necessary, include extending the trust and the term of the trustee's
appointment by a period requested by the United States.
VI. Notice of Proposed Divestiture
- Within two (2) business days following execution of a definitive divestiture
agreement, defendants or the trustee, whichever is then responsible for effecting the divestiture
required herein, shall notify the United States of any proposed divestiture required by Section IV
or V of this Final Judgment. If the trustee is responsible, it shall similarly notify defendants. The
notice shall set forth the details of the proposed divestiture and list the name, address, and
telephone number of each person not previously identified who offered or expressed an interest
in or desire to acquire any ownership interest in the Divestiture Business, together with full
details of the same.
- Within fifteen (15) calendar days of receipt by the United States of such notice,
the United States may request from defendants, the proposed Acquirer, any other third party, or
the trustee, if applicable, additional information concerning the proposed divestiture, the
proposed Acquirer, and any other potential Acquirer. Defendants and the trustee shall furnish
any additional information requested within fifteen (15) 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 the United States has been provided the additional information requested
from defendants, the proposed Acquirer, any third party, and the trustee, whichever is later, the
United States shall provide written notice to defendants and the trustee, if there is one, stating
whether or not it objects to the proposed divestiture. If the United States provides written notice
that it does not object, the divestiture may be consummated, subject only to defendants' limited
right to object to the sale under Section V, Paragraph C of this Final Judgment. Absent written
notice that the United States does not object to the proposed Acquirer or upon objection by the
United States, a divestiture proposed under Section IV or Section V shall not be consummated.
Upon objection by defendants under Section V, Paragraph C, a divestiture proposed under
Section V shall not be consummated unless approved by the Court.
VII. Financing
Defendants shall not finance all or any part of any purchase made pursuant to Section IV
or V of this Final Judgment.
VIII. Hold Separate
Until the divestiture required by this Final Judgment has 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 divestiture ordered by this
Court.
IX. Affidavits
- Within twenty (20) calendar days of the filing of the Complaint in this matter, and
every thirty (30) calendar days thereafter until the divestiture has been completed under Section
IV or V, defendants shall deliver to the United States an affidavit as to the fact and manner of its
compliance with Section IV or V of this Final Judgment. Each such affidavit shall include the
name, address, and telephone number of each person who, during the preceding thirty (30)
calendar days, 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
Divestiture Business, and shall describe in detail each contact with any such person during that
period. Each such affidavit shall also include a description of the efforts defendants have taken
to solicit buyers for the Divestiture Business, and to provide required information to prospective
Acquirers, including the limitations, if any, on such information. Assuming the information set
forth in the affidavit is true and complete, any objection by the United States to information
provided by defendants, including limitation on information, shall be made within fourteen (14)
calendar days of receipt of such affidavit.
- Within twenty (20) calendar days of the filing of the Complaint in this matter,
defendants shall deliver to the United States an affidavit that describes in reasonable detail all
actions defendants have taken and all steps defendants have implemented on an ongoing basis to
comply with Section VIII of this Final Judgment. Defendants shall deliver to the United States
an affidavit describing any changes to the efforts and actions outlined in defendants' earlier
affidavits filed pursuant to this section within fifteen (15) calendar days after the change is
implemented.
- Defendants shall keep all records of all efforts made to preserve and divest the
Divestiture Business until one year after such divestiture has been completed.
X. Compliance Inspection
- For the purposes of determining or securing compliance with this Final Judgment,
or of determining whether the Final Judgment should be modified or vacated, and subject to any
legally recognized privilege, from time to time authorized representatives of the United States
Department of Justice Antitrust Division ("DOJ"), including consultants and other persons
retained by the United States, shall, upon written request of an authorized representative of the
Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to
defendants, be permitted:
- access during defendants' office hours to inspect and copy, or at the option of the
United States, to require defendants to provide hard copy or electronic copies of,
all books, ledgers, accounts, records, data, and documents in the possession,
custody, or control of defendants, relating to any matters contained in this Final
Judgment; and
- to interview, either informally or on the record, defendants' officers, employees,
or agents, who may have their individual counsel present, regarding such matters.
The interviews shall be subject to the reasonable convenience of the interviewee
and without restraint or interference by defendants.
- Upon the written request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, defendants shall submit written reports or responses
to written interrogatories, under oath if requested, relating to any of the matters contained in this
Final Judgment as may be requested.
- No information or documents obtained by the means provided in this section shall
be divulged by the United States to any person other than an 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 securing
compliance with this Final Judgment, or as otherwise required by law.
- If at the time information or documents are furnished by defendants to the United
States, 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)(1)(G) 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)(1)(G) of the Federal Rules of Civil Procedure," then the
United States shall give defendants ten (10) calendar days notice prior to divulging such material
in any legal proceeding (other than a grand jury proceeding).
XI. No Reacquisition
Defendants may not reacquire any part of the Divestiture Business during the term of this
Final Judgment.
XII. Retention of Jurisdiction
This Court retains jurisdiction to enable any party to this Final Judgment to apply to this
Court at any time for further orders and directions as may be necessary or appropriate to carry out
or construe this Final Judgment, to modify any of its provisions, to enforce compliance, and to
punish violations of its provisions.
XIII. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall expire ten (10) years
from the date of its entry.
XIV. Public Interest Determination
Entry of this Final Judgment is in the public interest. The parties have complied with the
requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, including making
copies available to the public of this Final Judgment, the Competitive Impact Statement, and any
comments thereon and the United States's responses to comments. Based upon the record before
the Court, which includes the Competitive Impact Statement and any comments and response to
comments filed with the Court, entry of this Final Judgment is in the public interest.
Date: February 17, 2009
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Court approval subject to procedures
of Antitrust Procedures and Penalties
Act, 15 U.S.C. § 16
_______________/s/________________
United States District Judge
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