Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices 25071

concerning the Commission may also be

obtained by accessing its Internet server

(http://www.usitc.gov).

Issued April 28, 1998.

By order of the Commission.

Donna R. Koehnke,

Secretary.

[FR Doc. 98–12011 Filed 5–5–98; 8:45 am]

BILLING CODE 7020–02–P

DEPARTMENT OF JUSTICE (DOJ)

President’s Advisory Board on Race;

Meeting

ACTION: President’s Advisory Board on

Race; notice of meeting.

SUMMARY: The President’s Advisory

Board on Race will meet from

approximately 9:00 am to Noon on May

19, 1998 in Washington, D.C. at a site

to be determined to discuss issues

relating to race and crime and the

administration of justice. The meeting

will include a panel discussion with

national experts.

The public is welcome to attend the

Advisory Board meeting on a first-come,

first-seated basis. Members of the public

may also submit to the contact person,

any time before or after the meeting,

written statements to the Board. Written

comments may be submitted by mail,

telegram, facsimile, or electronic mail,

and should contain the writer’s name,

address and commercial, government, or

organizational affiliation, if any. The

address of the President’s Initiative on

Race is 750 17th Street, N.W.,

Washington, D.C. 20503. The electronic

mail address is http://

www.whitehouse.gov/Initiatives/One

America.

FOR FURTHER INFORMATION: Contact our

main office number, (202) 395–1010, for

the exact time and location of the

meetings. Other comments or questions

regarding this meeting may be directed

to Randy D. Ayers, (202) 395–1010, or

via facsimile, (202) 395–1020.

Dated: May 1, 1998.

Randy Ayers,

Executive Officer.

[FR Doc. 98–12040 Filed 5–5–98; 8:45 am]

BILLING CODE 4410–13–M

DEPARTMENT OF JUSTICE

Antitrust Division

[Civil Action No. 98–CIV–2716]

Proposed Final Judgment and

Competitive Impact Statement United

States of America, State of New York,

and State of Illinois v. Sony

Corporation of America, LTM Holdings,

Inc. d/b/a Loews Theatres, Cineplex

Odeon Corporation, and J.E. Seagram

Corp.

Notice is hereby given pursuant to the

Antitrust Procedures and Penalties Act,

15 U.S.C. 16(b)–(h), that a proposed

Final Judgment, Stipulation and Order,

and Competitive Impact Statement have

been filed with the United States

District Court for the Southern District

of New York, Case No. 98–CIV–2716.

The proposed Final Judgment is subject

to approval by the Court after the

expiration of the statutory 60-day public

comment period and compliance with

the Antitrust Procedures and Penalties

Act, 15 U.S.C. 16(b)–(h).

The United States, the State of New

York, and the State of Illinois filed a

civil antitrust Complaint on April 16,

1998, alleging that the proposed merger

of LTM Holdings, Inc. (‘‘Loews’’) and

Cineplex Odeon Corporation

(‘‘Cineplex’’) would violate Section 7 of

the Clayton Act, 15 U.S.C. 18. The

Complaint alleges that the proposed

merger would have combined the first

and second largest theatre chains in

Manhattan and Chicago. In Manhattan

and Chicago, the combined chains

would have had market shares, by

revenue, of 67 percent and 77 percent,

respectively. The complaint states that

the merger would have reduced

competition in both markets, leading to

higher ticket prices and reduced theatre

quality for first-run movies. It also

would have allowed the newly merged

firm to reduce competition by lowering

film rentals paid to distributors for firstrun movies.

The prayer for relief seeks: (a)

Adjudication that the proposed merger

would violate Section 7 of the Clayton

Act; (b) permanent injunctive relief

preventing the consummation of the

proposed merger; (c) an award to each

plaintiff of the costs of the action; and

(d) such other relief as is proper.

A Stipulation and Order and a

proposed Final Judgment were filed

with the court at the same time the

Complaint was filed. The proposed

Final Judgment requires Loews and

Cineplex to divest 14 theatres in

Manhattan and 11 theatres in the

Chicago area to a buyer or buyers,

acceptable to the United States (after

consultation with the State of New York

or the State of Illinois as the case may

be), that will continue to operate them

as movie theatres. Unless the United

States grants a time extension, the

divestitures must be completed within

one-hundred and eighty (180) calendar

days after the filing of the Complaint in

this matter or five (5) days after notice

of the entry of the Final Judgment by the

Court, whichever is later.

If the divestitures are not completed

within the divestiture period, the Court,

upon application of the United States, is

to appoint a trustee selected by the

United States to sell the assets. The

proposed Final Judgment also requires

that, until the divestitures mandated by

the Final Judgment have been

accomplished, Loews and Cineplex

must maintain and operate the 25

theatres to be divested as active

competitors, maintain the management,

staffing, sales, and marketing of the

theatres, and maintain the theatres in

operable condition at current capacity

configurations. Further, the proposed

Final Judgment requires defendants to

give the United States prior notice

regarding future motion picture theatre

acquisitions in Manhattan or Cook

County, Illinois.

The plaintiffs and the defendants

have stipulated that the proposed Final

Judgment may be entered after

compliance with the APPA. Entry of the

proposed Final Judgment would

terminate this action, except that the

Court would retain jurisdiction to

construe, modify, or enforce the

provisions of the proposed Final

Judgment and to punish violations

thereof.

A Competitive Impact Statement filed

by the United States describes the

Complaint, the proposed Final

Judgment, and remedies available to

private litigants.

Public comment is invited within the

statutory 60-day comment period. Such

comments, and the responses thereto,

will be published in the Federal

Register and filed with the Court.

Written comments should be directed to

Craig W. Conrath, Chief, Merger Task

Force, Antitrust Division, 1401 H Street,

NW., Suite 4000, Washington, DC 20530

(telephone: 202–307–0001).

Copies of the Complaint, Stipulation

and Order, proposed Final Judgment,

and Competitive Impact Statement are

available for inspection in Room 215 of

the Antitrust Division, Department of

Justice, 325 7th Street, NW.,

Washington, DC 20530 (telephone: 202–

514–2481) and at the office of the Clerk

of the United States District Court for

the Southern District of New York, 500

Pearl Street, New York, NY 10007.
25072 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

Copies of any of these materials may be

obtained upon request and payment of

a copying fee.

Constance K. Robinson,

Director of Operations and Merger

Enforcement Antitrust Division.

Stipulation and Order

It is stipulated by and between the

undersigned parties, by their respective

attorneys, as follows:

1. The Court has jurisdiction over the

subject matter of this action and over

each of the parties hereto, and venue of

this action is proper in the Southern

District of New York;

2. The parties stipulate that a Final

Judgment in the form hereto attached

may be filed and entered by the Court,

upon the motion of any party or upon

the Court’s own motion, at any time

after compliance with the requirements

of the Antitrust Procedures and

Penalties Act (15 U.S.C. 16), and

without further notice to any party or

other proceedings, provided that

plaintiff the United States has not

withdrawn its consent, which it may do

at any time before the entry of the

proposed Final Judgment by serving

notice thereof on defendants and by

filing that notice with the Court;

3. The defendants (as defined in

paragraph II (B)–(F) of the proposed

Final Judgment attached hereto) shall

abide by and comply with the

provisions of the proposed Final

Judgment pending entry of the Final

Judgment by the Court, and shall, from

the date of the filing of this Stipulation

by the parties, comply with all the terms

and provisions of the proposed Final

Judgment as though the same were in

full force and effect as an order of the

Court;

4. Defendants shall not consummate

their transaction before the Court has

signed this Stipulation and Order;

5. In the event plaintiff United States

withdraws its consent, as provided in

paragraph 2 above, or if the proposed

Final Judgment is not entered pursuant

to this Stipulation, the time has expired

for all appeals of any Court ruling

declining entry of the proposed Final

Judgment, and the Court has not

otherwise ordered continued

compliance with the terms and

provisions of the proposed Final

Judgment, this Stipulation shall be of no

effect whatever, and the making of this

Stipulation shall be without prejudice to

any party in this or any other

proceeding;

6. Loews and Cineplex represent that

the divestitures ordered in the proposed

Final Judgment can and will be made,

and that Loews and Cineplex will later

raise no claims of hardship or difficulty

as grounds for asking the Court to

modify any of the divestiture provisions

contained therein;

7. All parties agree that this agreement

can be signed in multiple counterparts.

Dated: April 16, 1998.

For Plaintiff United States:

Allen P. Grunes (AG 4775),

U.S. Department of Justice, Antitrust

Division, Merger Task Force, 1401 H Street,

NW, Suite 4000, Washington DC 20530, (202)

307–0001.

For Plaintiff State of New York:

Dennis C. Vacco, Attorney General.

By: Stephen D. Houck (SH 0959),

Assistant Attorney General in Charge,

Antitrust Bureau, Office of the Attorney

General, State of New York, 120 Broadway,

New York, NY 10271, (212) 416–8280.

For Plaintiff State of Illinois:

James E. Ryan, Attorney General.

By: Christine H. Rosso (CR 3708),

Chief, Antitrust Bureau, Office of the

Attorney General, State of Illinois, 100 West

Randolph Street, 13th Floor, Chicago, Illinois

60601, (312) 814–5610.

For Defendants Sony Corporation of

America and LTM Holdings, Inc.:

Ira S. Sacks (IS 2861),

Fried, Frank, Harris, Shriver & Jacobson, One

New York Plaza, New York, NY 10004, (212)

859–8000.

For Defendant Cineplex Odeon

Corporation:

Alan J. Weinschel (AW 5659),

Weil, Gotshal & Manges LLP, 767 Fifth

Avenue, New York, NY 10153, (212) 310–

8000.

For Defendant J. E. Seagram Corp.:

Kenneth R. Logan (KL 7745),

Simpson Thacher & Bartlett, 425 Lexington

Avenue, New York, NY 10017, (212) 455–

2000.

So ordered:

United States District Judge

Final Judgment

Whereas, plaintiffs, the United States

of America, the State of New York, and

the State of Illinois filed their Complaint

in this action on April 16, 1998, and

plaintiffs and defendants by their

respective attorneys, having consented

to the entry of this Final Judgment

without trial or adjudication of any

issue of fact or law herein, and without

this Final Judgment constituting any

evidence against or an admission by any

party with respect to any issue of law

or fact herein;

And whereas, defendants have agreed

to be bound by the provisions of this

Final Judgment pending its approval by

the Court;

And whereas, plaintiffs intend Loews

and Cineplex, as hereinafter defined, to

be required to preserve competition by

promptly divesting the 14 theatres in

Manhattan and 11 theatres in Chicago

identified below;

And whereas, plaintiffs required

Loews and Cineplex to make the

divestitures for the purpose of

establishing one or more viable

competitors in both Manhattan and

Chicago in the exhibition of first-run

motion pictures;

And whereas, Loews and Cineplex

have represented to the plaintiffs that

the divestitures ordered herein can and

will be made and that Loews and

Cineplex will later raise no claims of

hardship or difficulty as grounds for

asking the Court to modify any of the

divestitures contained below;

Now, therefore, before the taking of

any testimony, and without trial or

adjudication of any issue of fact or law

herein, and upon consent of the parties

hereto, it is hereby Ordered, Adjudged,

And Decreed as follows:

I. Jurisdiction

This Court has jurisdiction over each

of the parties hereto and over the subject

matter of this action. The Complaint

states a claim by the plaintiffs upon

which relief may be granted against the

defendants, as hereinafter defined,

under Section 7 of the Clayton Act, as

amended (15 U.S.C. 18).

II. Definitions

As used in this Final Judgment:

A. DoJ means the Antitrust Division of

the United States Department of Justice.

B. Loews means defendant LTM

Holdings, Inc. d/b/a/ Loews Theatres, a

Delaware corporation with its

headquarters in New York, New York,

and its successors, assigns, subsidiaries,

divisions, groups, affiliates,

partnerships and joint ventures, and

directors, officers, managers, agents, and

employees.

C. Cineplex means Cineplex Odeon

Corporation, an Ontario corporation

with its headquarters in Toronto,

Canada, and its successors, assigns,

subsidiaries, divisions, groups,

affiliates, partnerships and joint

ventures, and directors, officers,

managers, agents, and employees.

D. Sony means defendant Sony

Corporation of America, a New York

corporation with its headquarters in

New York, New York, and its

successors, assigns, subsidiaries,

divisions, groups, affiliates,

partnerships and joint ventures, and

directors, officers, managers, agents, and

employees.

E. Seagram means defendant J.E.

Seagram Corp., a Delaware corporation

with its headquarters in New York, New

York, and its successors, assigns,

subsidiaries (including but not limited

to Universal Studios, Inc.), divisions,

groups, affiliates, partnerships and joint
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices 25073

ventures, and directors, officers,

managers, agents, and employees.

F. Defendants means Loews,

Cineplex, Sony and Seagram.

G. The Manhattan theatre assets

means the motion picture theatre

businesses operated by Loews and

Cineplex under the following names at

the following addresses in Manhattan,

New York:

i. Chelsea, 260 West 23rd Street.

ii. Chelsea West, 333 West 23rd Street.

iii. 62nd & First, 400 East 62nd Street.

iv. Ziegfeld, 141 West 54th Street.

v. Park & 86th Street, 125 East 86th Street.

vi. Waverly Twin, 323 Sixth Avenue.

vii. Olympia, 2770 Broadway.

viii. Art Greenwich, 97 Greenwich Avenue.

ix. Metro Twin, 2626 Broadway.

x. Beekman, 1254 Second Avenue.

xi. Regency, 1987 Broadway.

xii. 62nd Street & Broadway, 1871

Broadway.

xiii. 59th Street East, 239 East 59th Street.

xiv. 34th Street Showplace, 238 East 34th

Street.

The term Manhattan theatre assets

includes all tangible and intangible

assets used in the operation of these

theatres including: All real property

(owned or leased); all personal property,

inventory, office furniture, fixed assets

and fixtures, materials, supplies, and

other tangible property or improvements

used in the operation of the theatres; all

licenses, permits and authorizations

issued by any governmental

organization relating to the operation of

the theatres; and all contracts,

agreements, leases, licenses,

commitments and understandings

pertaining to the theatres including

supply agreements and licenses to

exhibit motion pictures.

H. The Chicago theatre assets means

the motion picture theatre businesses

operated by Loews and Cineplex under

the following names at the following

addresses in Cook County, Illinois:

i. 600 North Michigan, 600 N. Michigan

Ave., Chicago.

ii. 900 North Michigan, 900 N. Michigan

Ave., Chicago.

iii. Biograph, 2433 N. Lincoln Ave.,

Chicago.

iv. Bricktown, 6420 W. Fullerton, Chicago.

v. Watertower 1–4, 845 N. Michigan Ave.,

Chicago.

vi. Watertower 5–7, 175 East Chestnut,

Chicago.

vii. Burnham Plaza, 826 S. Wabash,

Chicago.

viii. Broadway, 3175 N. Broadway,

Chicago.

ix. Hyde Park Quad, 5238 S. Harper,

Chicago.

x. River Run Eightplex, 16621 Torrence

Ave., Lansing.

xi. Old Orchard Quad, 9400 Skokie Blvd.,

Skokie.

The term Chicago theatre assets

includes all tangible and intangible

assets used in the operation of these

theatres including: All real property

(owned or leased); all personal property,

inventory, office furniture, fixed assets

and fixtures, materials, supplies, and

other tangible property or improvements

used in the operation of the theatres; all

licenses, permits and authorizations

issued by any governmental

organization relating to the operation of

the theatres; and all contracts,

agreements, leases, licenses,

commitments and understandings

pertaining to the theatres including

supply agreements and licenses to

exhibit motion pictures.

I. Acquirer means the entity or entities

to whom Loews and Cineplex divest the

Manhattan theatre assets or the Chicago

theatre assets under this Final

Judgment.

III. Applicability

A. The provisions of this Final

Judgment apply to the defendants, their

successors and assigns, their

subsidiaries, directors, officers,

managers, agents, and employees, and

all other persons in active concert or

participation with any of them who

shall have received actual notice of this

Final Judgment by personal service or

otherwise.

B. Each defendant shall require, as a

condition of the sale or other

disposition of all or substantially all of

the assets used in its business of

operating motion picture theatres in

either Manhattan or Cook County,

Illinois, that the acquiring party or

parties agree to be bound by the

provisions of this Final Judgment;

provided, however, that Loews and

Cineplex need not obtain such an

agreement from an Acquirer in

connection with the divestiture of the

Manhattan theatre assets or the Chicago

theatre assets.

IV. Divestiture

A. Loews and Cineplex are hereby

ordered and directed in accordance with

the terms of this Final Judgment, within

one-hundred and eighty (180) calendar

days after the filing of the Complaint in

this matter or five (5) days after notice

of the entry of this Final Judgment by

the Court, whichever is later, to divest

the Manhattan theatre assets to an

Acquirer or Acquirers acceptable to DoJ

in its sole discretion after consultation

with the State of New York and divest

the Chicago theatre assets to an Acquirer

or Acquirers acceptable to DoJ in its sole

discretion after consultation with the

State of Illinois.

B. Loews and Cineplex shall use their

best efforts to accomplish the

divestitures as expeditiously and timely

as possible. DoJ, in its sole discretion,

may extend the time period for any

divestiture for two (2) additional thirty

(30) day periods of time, not to exceed

sixty (60) calendar days in total.

C. In accomplishing the divestitures

ordered by this Final Judgment, Loews

and Cineplex promptly shall make

known, by usual and customary means,

the availability of the Manhattan theatre

assets and the Chicago theatre assets

described in this Final Judgment. Loews

and Cineplex shall inform any person

making an inquiry regarding a possible

purchase that the sale is being made

pursuant to this Final Judgment and

provide such person with a copy of this

Final Judgment. Loews and Cineplex

shall also offer to furnish to all

prospective Acquirers, subject to

customary confidentiality assurances,

all information regarding the Manhattan

theatre assets and the Chicago theatre

assets customarily provided in a due

diligence process except such

information subject to attorney-client

privilege or attorney work-product

privilege. Loews and Cineplex shall

make available such information to DoJ

at the same time that such information

is made available to any other person.

D. Loews and Cineplex shall permit

prospective Acquirers of the Manhattan

theatre assets and the Chicago theatre

assets to have reasonable access to

personnel and to make such inspection

of the physical facilities of the

Manhattan theatre assets and the

Chicago theatre assets and any and all

financial, operational, or other

documents and information customarily

provided as part of a due diligence

process.

E. The defendants shall not take any

action that will impede in any way the

operation of the Manhattan theatre

assets or the Chicago theatre assets.

F. Unless DoJ otherwise consents in

writing, the divestitures pursuant to

Section IV, or by trustee appointed

pursuant to Section V of this Final

Judgment, shall include the entire

Manhattan theatre assets and Chicago

theatre assets and be accomplished by

selling or otherwise conveying the

Manhattan theatre assets and Chicago

theatre assets to an Acquirer or

Acquirers in such a way as to satisfy DoJ

in its sole discretion (after consultation

with the State of New York or the State

of Illinois as the case may be), that the

Manhattan theatre assets and the

Chicago theatre assets can and will be

used by the Acquirer(s) as part of a

viable, ongoing business of exhibition of

first-run films. Divestiture of the
25074 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

Manhattan theatre assets and the

Chicago theatre assets may be made to

one or more Acquirers provided that in

each instance it is demonstrated to the

sole satisfaction of DoJ (after

consultation with the State of New York

or the State of Illinois as the case may

be) that the Manhattan theatre assets

and the Chicago theatre assets will

remain viable and the divestiture of

such assets will remedy the competitive

harm alleged in the complaint. The

divestitures, whether pursuant to

Section IV or Section V of this Final

Judgment: (1) Shall be made to an

Acquirer or Acquirers who it is

demonstrated to DoJ’s sole satisfaction

(after consultation with the State of New

York or the State of Illinois as the case

may be) has or have the intent and

capability (including the necessary

managerial, operational, and financial

capability) of competing effectively in

the business of exhibition of first-run

films; (2) shall be accomplished so as to

satisfy DoJ, in its sole discretion (after

consultation with the State of New York

or the State of Illinois as the case may

be), that none of the terms of any

agreement between an Acquirer and

Loews or Cineplex give Loews or

Cineplex 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.

V. Appointment of Trustee

A. In the event that Loews and

Cineplex have not divested the

Manhattan theatre assets and the

Chicago theatre assets within the time

specified in Section IV(A) of this Final

Judgment, the Court shall appoint, on

application of the United States, a

trustee selected by DoJ to effect the

divestiture of the Manhattan theatre

assets and the Chicago theatre assets.

B. After the appointment of a trustee

becomes effective, only the trustee shall

have the right to sell the Manhattan

theatre assets and the Chicago theatre

assets. The trustee shall have the power

and authority to accomplish the

divestitures at the best price then

obtainable upon a reasonable effort by

the trustee, subject to the provisions of

Sections IV and X of this Final

Judgment, and shall have such other

powers as the Court shall deem

appropriate. Subject to Section V (C) of

this Final Judgment, the trustee shall

have the power and authority to hire at

the cost and expense of Loews and

Cineplex any investment bankers,

attorneys, or other agents reasonably

necessary in the judgment of the trustee

to assist in the divestitures, and such

professionals and agents shall be

accountable solely to the trustee. The

trustee shall have the power and

authority to accomplish the Manhattan

theatre assets divestitures at the earliest

possible time to an Acquirer or

Acquirers acceptable to DoJ in its sole

discretion (after consultation with the

State of New York), and the Chicago

theatre assets divestitures at the earliest

possible time to an Aquirer or Acquirers

acceptable to DoJ in its sole discretion

(after consultation with the State of

Illinois), and shall have such other

powers as this Court shall deem

appropriate. Loews and Cineplex shall

not object to a sale by the trustee on any

grounds other than the trustee’s

malfeasance. Any such objections by

Loews and Cineplex must be conveyed

in writing to plaintiffs and the trustee

within ten (10) calendar days after the

trustee has provided the notice required

under Section VII of this Final

Judgment.

C. The trustee shall serve at the cost

and expense of Loews and Cineplex, on

such terms and conditions as the Court

may prescribe, 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 Loews

and Cineplex and the trust shall then be

terminated. The compensation of such

trustee and of any professionals and

agents retained by the trustee shall be

reasonable in light of the value of the

divested business and based on a fee

arrangement providing the trustee with

an incentive based on the price and

terms of the divestitures and the speed

with which they are accomplished.

D. Loews and Cineplex shall use their

best efforts to assist the trustee in

accomplishing the required divestitures,

including best efforts to effect all

necessary consents and regulatory

approvals. 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 businesses to be

divested, and Loews and Cineplex shall

develop financial or other information

relevant to the business to be divested

customarily provided in a due diligence

process as the trustee may reasonably

request, subject to customary

confidentiality assurances. Loews and

Cineplex shall permit prospective

Acquirers of the assets to have

reasonable access to personnel and to

make such inspection of physical

facilities and any and all financial,

operational or other documents and

other information as may be relevant to

the divestitures required by this Final

Judgment.

E. After its appointment, the trustee

shall file monthly reports with the

parties and the Court setting forth the

trustee’s efforts to accomplish the

divestitures ordered pursuant to this

Final Judgment; provided, however, that

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 businesses

to be divested, and shall describe in

detail each contact with any such

person during that period. The trustee

shall maintain full records of all efforts

made to divest the business to be

divested.

F. If the trustee has not accomplished

such divestitures within six (6) months

after its appointment, the trustee

thereupon shall file promptly with the

Court a report setting forth (1) the

trustee’s efforts to accomplish the

required divestitures, (2) the reasons, in

the trustee’s judgment, why the required

divestitures have not been

accomplished, and (3) the trustee’s

recommendations; provided, however,

that 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 parties, who

shall each have the right to be heard and

to make additional recommendations

consistent with the purpose of the trust.

The Court shall enter thereafer such

orders as it shall deem appropriate in

order to carry out the purpose of the

trust which may, if necessary, include

extending the trust and the term of the

trustee’s appointment by a period

requested by DoJ.

VI. Notice

Unless such transaction is otherwise

subject to the reporting and waiting

period requirements of the Hart-ScottRodino Antitrust Improvements Act of

1976, as amended, 15 U.S.C. 18a (the

‘‘HSR Act’’), defendants, without

providing advance notification to DoJ,

shall not directly or indirectly acquire

any assets of or any interest, including

any financial, security, loan, equity or

management interest, in any thenexisting motion picture theatre in either
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices 25075

Manhattan in the State of New York or

in Cook County in the State of Illinois.

Such notification shall be provided to

the DoJ in the same format as, and per

the instructions relating to the

Notification and Report Form set forth

in the Appendix to Part 803 of Title 16

of the Code of Federal Regulations as

amended, except that the information

requested in Items 5–9 of the

instructions must be provided only with

respect to defendants’ motion picture

theatre operations in Manhattan in the

State of New York or in Cook County in

the State of Illinois. Notification shall be

provided at least thirty (30) days prior

to acquiring any such interest, and shall

include, beyond what may be required

by the applicable instructions, the

names of the principal representatives

of the parties to the agreement who

negotiated the agreement, and any

management or strategic plans

discussing the proposed transaction. If

within the 30-day period after

notification, representatives of DoJ make

a written request for additional

information, defendants shall not

consummate the proposed transaction

or agreement until twenty (20) days after

submitting all such additional

information. Early termination of the

waiting periods in this paragraph may

be requested and, where appropriate,

granted in the same manner as is

applicable under the requirements and

provisions of the HSR Act and rules

promulgated thereunder. This Section

shall be broadly construed and any

ambiguity or uncertainty regarding the

filing of notice under this Section shall

be resolved in favor of filing notice.

VII. Notification

Within two (2) business days

following execution of a definitive

agreement, contingent upon compliance

with the terms of this Final Judgment,

to effect, in whole or in part, any

proposed divestitures pursuant to

Sections IV or V of this Final Judgment,

Loews and Cineplex or the trustee,

whichever is then responsible for

effecting the divestitures, shall notify

DoJ, and, as the case may be, in the State

of New York or the State of Illinois of

the proposed divestitures. If the trustee

is responsible, it shall similarly notify

Loews and Cineplex. The notice shall

set forth the details of the proposed

transaction and list the name, address,

and telephone number of each person

not previously identified who offered to,

or expressed an interest in or a desire to,

acquire any ownership interest in the

businesses to be divested that are the

subject of the binding contract, together

with full details of same. Within fifteen

(15) calendar days of receipt by DoJ of

notice, DoJ may request from Loews or

Cineplex, the proposed Acquirer, or any

other third party additional information

concerning the proposed divestitures

and the proposed Acquirer. Loews and

Cineplex and the trustee shall furnish

any additional information requested

from them 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 DoJ has been

provided the additional information

requested from Loews and Cineplex, the

proposed Acquirer, and any third party,

whichever is later, DoJ shall provide

written notice to Loews and Cineplex

and the trustee, if there is one, stating

whether or not it objects to the proposed

divestitures. If DoJ provides written

notice to Loews and Cineplex and the

trustee that DoJ does not object, then the

divestitures may be consummated,

subject only to Loews and Cineplex’s

limited right to object to the sale under

Section V(B) of this Final Judgment.

Absent written notice that DoJ does not

object to the proposed Acquirer or upon

objection by DoJ, a divestiture proposed

under Section IV or Section V may not

be consummated. Upon objection by

Loews and Cineplex under the

provision in Section V(B), a divestiture

proposed under Section V shall not be

consummated unless approved by the

Court.

VIII. Affidavits

A. Within twenty (20) calendar days

of the filing of the Complaint in this

matter and every thirty (30) calendar

days thereafter until the divestitures

have been completed whether pursuant

to Section IV or Section V of this Final

Judgment, Loews and Cineplex shall

deliver to DoJ an affidavit as to the fact

and manner of compliance with

Sections IV or V of this Final Judgment.

Each such affidavit shall include, inter

alia, the name, address, and telephone

number of each person who, at any time

after the period coverage by the last

such report, 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 businesses

to be divested, 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 that Loews and Cineplex

have taken to solicit a buyer for the

relevant assets and to provide required

information to prospective Acquirers.

B. Within twenty (20) calendar days

of the filing of the Complaint in this

matter, Loews and Cineplex shall

deliver to DOJ an affidavit which

describes in detail all actions they have

taken and all steps they have

implemented on an on-going basis to

preserve the Manhattan theatre assets

and the Chicago theatre assets pursuant

to Section IX of this Final Judgment.

The affidavit also shall describe, but not

be limited to, the efforts of Loews and

Cineplex to maintain and operate the

Manhattan theatre assets and the

Chicago theatre assets as active

competitors, maintain the management,

staffing, sales, and marketing of the

Manhattan theatre assets and the

Chicago theatre assets, and maintain the

Manhattan and the Chicago theatre

assets in operable condition at current

capacity configurations. Loews and

Cineplex shall deliver to DoJ an affidavit

describing any changes to the efforts

and actions outlined in their earlier

affidavit(s) filed pursuant to this Section

within fifteen (15) calendar days after

the change is implemented.

C. Until one year after such

divestiture has been completed, Loews

and Cineplex shall preserve all records

of all efforts made to preserve the

business to be divested and effect the

divestitures.

IX. Preservation of Assets

Until the divestitures required by the

Final Judgment have been

accomplished, Loews and Cineplex

shall take all steps necessary to

maintain and operate the Manhattan

theatre assets and the Chicago theatre

assets as active competitors, maintain

the management, staffing, sales, and

marketing of the Manhattan theatre

assets and the Chicago theatre assets,

and maintain the Manhattan theatre

assets and the Chicago theatre assets in

operable condition at current capacity

configurations. Defendants shall take no

action that would jeopardize the

divestitures described in this Final

Judgment.

X. Financing

The defendants are ordered and

directed not to finance all or any part of

any purchase by an Acquirer or

Acquirers made pursuant to Sections IV

or V of this Final Judgment.

XI. Compliance Inspection

For purposes of determining or

securing compliance with the Final

Judgment and subject to any legally

recognized privilege, from time to time:

A. Duly authorized representatives of

the plaintiffs, upon the written request

of the Assistant Attorney General in

charge of the Antitrust Division, the

New York Attorney General or the

Illinois Attorney General, and on
25076 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

reasonable notice to the defendants

made to their principal offices, shall be

permitted:

1. Access during office hours of the

defendants to inspect and copy all

books, ledgers, accounts,

correspondence, memoranda, and other

records and documents in the

possession or under the control of the

defendants, who may have counsel

present, relating to the matters

contained in this Final Judgment; and

2. Subject to the reasonable

convenience of the defendants and

without restraint or interference from

any of them, to interview, either

informally or on the record, their

officers, employees, and agents, who

may have counsel present, regarding

any such matters.

B. Upon the written request of the

Assistant Attorney General in charge of

the Antitrust Division, the New York

Attorney General, or the Illinois

Attorney General made to the

defendants’ principal offices, the

defendants shall submit such written

reports, under oath if requested, with

respect to any matter contained in the

Final Judgment.

C. No information or documents

obtained by the means provided in

Sections VIII or XI of this Final

Judgment shall be divulged by a

representative of the plaintiffs to any

person other than a duly authorized

representative of the Executive Branch

of the United States, or of each state

government, except in the course of

legal proceedings to which at least one

of the plaintiffs is a party (including

grand jury proceedings,), or for the

purpose of securing compliance with

this Final Judgment, or as otherwise

required by law.

D. If at the time information or

documents are furnished by the

defendants to the plaintiffs, the

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)(7) of the Federal Rules

of Civil Procedure, and the defendants

mark each pertinent page of such

material, ‘‘Subject to claim of protection

under Rule 26(c)(7) of the Federal Rules

of Civil Procedure,’’ then ten (10)

calendar days notice shall be given by

the plaintiffs to the defendants prior to

divulging such material in any legal

proceeding (other than a grand jury

proceeding) to which the defendants are

not a party.

XII. Retention of Jurisdiction

Jurisidiction is retained by this Court

for the purpose of enabling any of the

parties to this Final Judgment to apply

to this Court at any time for such further

orders and directions as may be

necessary or appropriate for the

construction or carrying out of this Final

Judgment, for the modification of any of

the provisions hereof, for the

enforcement of compliance herewith,

and for the punishment of any

violations hereof.

XIII. Termination

Unless this Court grants an extension,

this Final Judgment will expire upon

the tenth anniversary of the date of its

entry.

XIV. Public Interest

Entry of this Final Judgment is in the

public interest.

Dated llllllllllllllllll

lllllllllllllllllllll

United States District Judge

Competitive Impact Statement

Plaintiff, the United States of

America, pursuant to Section 2(b) of the

Antitrust Procedures and Penalties Act

(‘‘APPA’’), 15 U.S.C. 16(b)–(h), files this

Competitive Impact Statement relating

to the proposed Final Judgment

submitted for entry in this civil antitrust

proceeding.

I. Nature and Purpose of the Proceeding

Plaintiffs the United States, the State

of New York, and the State of Illinois

filed a civil antitrust Complaint on April

16, 1998, alleging that a proposed

merger of LTM Holdings, Inc. (‘‘Loews’’)

and Cineplex Odeon Corp. (‘‘Cineplex’’)

would violate Section 7 of the Clayton

Act, 15 U.S.C. 18. The Complaint alleges

that Loews and Cineplex both operate

motion picture theatres throughout the

United States, and that they each

operate first-run motion picture theatres

in Manhattan and Chicago. The merger

would combine the two leading theatre

circuits in both Manhattan and Chicago

and give the newly merged firm a

dominant position in both localities: in

Manhattan, the newly merged firm

would have a 67% market share (by

revenue) and in Chicago, the newly

merged firm would have a 77% market

share (by revenue). As a result, the

combination would substantially lessen

competition and tend to create a

monopoly in the markets for theatrical

exhibition of first-run films in both

Manhattan and Chicago.

The prayer for relief seeks: (1) an

adjudication that the proposed merger

described in the Complaint would

violate Section 7 of the Clayton Act; (b)

permanent injunctive relief preventing

the consummation of the transaction; (c)

an award to each plaintiff of the costs

of this action; and (d) such other relief

as is proper.

Shortly before this suit was filed, a

proposed settlement was reached that

permits Loews to complete its merger

with Cineplex, yet preserved

competition in the markets in which the

transactions would raise significant

competitive concerns. A Stipulation and

proposed Final Judgment embodying

the settlement were filed at the same

time the Complaint was filed.

The proposed Final Judgment orders

Loews and Cineplex to divest 14

theatres in Manhattan and 11 theatres in

the Chicago area to an acquirer

acceptable to the United States. Unless

the United States grants a time

extension, the divestitures must be

completed within one-hundred and

eighty (180) calendar days after the

filing of the Complaint in this matter or

five (5) days after notice of the entry of

this Final Judgment by the Court,

whichever is later.

If the divestitures are not completed

within the divestiture period, the Court,

upon application of the United States, is

to appoint a trustee selected by the

United States to sell the assets. The

proposed Final Judgment also requires

that, until the divestitures mandated by

the Final Judgment have been

accomplished, the defendants must

maintain and operate the 25 theatres to

be divested as active competitors,

maintain the management, staffing,

sales, and marketing of the theatres, and

maintain the theatres in operable

condition at current capacity

configurations. Further, the proposed

Final Judgment requires defendants to

give the United States prior notice

regarding future motion picture theatre

acquisitions in Manhattan or Cook

County, Illinois.

The plaintiffs and the defendants

have stipulated that the proposed Final

Judgment may be entered after

compliance with the APPA. Entry of the

proposed Final Judgment would

terminate this action, except that the

Court would retain jurisdiction to

construe, modify, or enforce the

provisions of the proposed Final

Judgment and to punish violations

thereof.

II. The Alleged Violations

A. The Defendants

Sony Corporation of America is a New

York corporation with its headquarters

in New York, New York.

LTM Holdings, Inc. is a Delaware

corporation which does business under

the name Loews Theatres and has its

principal executive offices in New York,

New York. Loews is an indirect wholly
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices 25077

owned subsidiary of Sony Pictures

Entertainment Inc., itself an indirect

wholly owned subsidiary of Sony

Corporation of America, which in turn

is an indirect wholly owned subsidiary

of Sony Corporation, a Japanese

company. Loews currently operates 139

theatres with 1,035 screens in 16 states.

Its annual revenues for the fiscal year

ending February 28, 1997 were

approximately $375 million.

Cinceplex is a Canadian corporation

headquartered in Toronto, Ontario. It

currently operates a total of 312 theatres

with 1,723 screens in the United States,

Canada and Hungary. Its United States

operations consist of 911 screens at 175

locations in 13 states and the District of

Columbia. Cineplex had annual

revenues of approximately $500 million

in 1996.

J.E. Seagram Corp. is a Delaware

corporation headquartered in New York,

New York. Its subsidiary, Universal

Studios, Inc., is the largest shareholder

of Cineplex.

B. Description of the Events Giving Rise

to the Alleged Violations

On September 30, 1997, Sony Pictures

Entertainment Inc., LTM Holdings, Inc.

and Cineplex entered into a merger

agreement. Pursuant to the agreement,

Cineplex will become a wholly owned

subsidiary of LTM Holdings, Inc., and

Sony Pictures Entertainment will

transfer all of its U.S. theatre assets not

owned by LTM Holdings, Inc. to LTM

Holdings, Inc. or its subsidiaries. LTM

Holdings, Inc. will then be renamed

Loews Cineplex Entertainment

Corporation (‘‘LCE’’). Following the

merger, Sony Pictures Entertainment

Inc. will own approximately 51% of

LCE and Universal Studios, Inc. will

own approximately 26% of LCE.

Loews and Cineplex compete in the

theatrical exhibition of first-run films in

Manhattan and Chicago: They compete

to obtain films from film distributors

and to attract movie-goers to their

theatres. The proposed merger, and the

threatened loss of competition that

would be caused thereby, precipitated

the government’s suit.

C. Anticompetitive Consequences of the

Proposed Transaction

The Complaint alleges that the

theatrical exhibition of first-run films in

Manhattan and Chicago each constitutes

a line of commerce and section of the

country, or relevant market, for antitrust

purposes. First-run films differ

significantly from other forms of

entertainment. The experience of

viewing a film in a theatre is an

inherently different experience from a

live show, a sporting event, or viewing

a videotape in the home. Ticket prices

for first-run films are also generally very

different than for other forms of

entertainment. A small but significant

increase in the price of tickets for firstrun films would not cause a sufficient

shift to other forms of entertainment to

make the increase unprofitable.

From a movie-goer’s standpoint,

theatres outside Manhattan and Chicago

are not acceptable substitutes for

theatres within those areas. A small but

significant increase in the price of

tickets for first-run films would not

cause a sufficient shift to theatres

outside Manhattan or Chicago to make

the increase unprofitable.

From a distributor’s standpoint, there

is no alternative to screening its first-run

films in first-run theatres. Given the

high population densities and number

of significant critics in both Manhattan

and Chicago, ‘‘passing’’ (i.e., not playing

a film in) Manhattan and Chicago is not

a viable option. From the distributor

standpoint as well, a small but

significant decrease in prices (i.e., a

decrease in film rental fees) would not

cause a sufficient shift by distributors to

other locations to make the decrease

unprofitable to exhibitors.

The Complaint alleges that the merger

of Loews and Cineplex would lessen

competition substantially and tend to

create a monopoly in the markets for

exhibition of first-run films in

Manhattan and Chicago. The proposed

transaction would create further market

concentration in already highly

concentrated markets, and the merged

firm would control a majority of box

office revenues in those markets. In

Manhattan, the market share possessed

by the largest theatre circuit would rise

from 46% percent to 67% percent of box

office revenues after the proposed

transaction. According to the

Herfindahl-Hirschman Index (‘‘HHI’’), a

widely-used measure of market

concentration defined and explained in

Appendix A, the merged firm’s posttransaction HHI in Manhattan would be

4815, representing an increase of 1911

points. In Chicago, the market share

possessed by the largest theatre circuit

would rise from 47% percent to 77%

percent of box office revenues after the

proposed transaction. The posttransaction HHI would equal 6438,

representing an increase of 2874 points.

These substantial increases in

concentration would likely lead the

merged firm to raise ticket prices.

Distributors and exhibitors often

break the Manhattan and Chicago

markets into ‘‘zones’’ that reflect various

neighborhoods—such as, in Manhattan,

the Upper East Side, the East Side, the

West Side, Broadway-Times Square,

Chelsea, and Greenwich Village, and in

Chicago, Downtown, Near North, North,

Far North, West, South, and Far South.

Movies typically will open and play at

only one theatre within a zone. The

merger would convert a number of film

zones in which Loews and Cineplex

compete with each other into zones in

which there would be no competition.

For instance, in the downtown Chicago

zone, the combined entity would

control all seven theatres. The same is

true in the north zone (Old Orchard/

Orchard Gardens), the west zone

(Bricktown Square/Norridge) and the far

south zone (River Run/River Oaks).

By reducing non-price competition,

the merger would also likely lead to

lower quality theatres by reducing the

incentive to maintain, upgrade and

renovate theatres in Manhattan and

Chicago, thus reducing the quality of the

viewing experience for movie-goer. It

also may allow the merged entity to

reduce the number of shows as there no

longer would be competitive pressure to

continue early and late shows.

Finally, the merger would also likely

lead to distributors receiving less in

revenue for the exhibition of their

pictures, either in the form of reduced

(or eliminated) guarantees, higher

overhead allowances for the exhibitors,

or a less favorable percentage of the box

office receipts. The reduced revenue

remitted to the distributors could lead to

fewer films being produced, or less

money being expended on high quality

films, to the ultimate detriment of

movie-goers.

New entry into the Manhattan and

Chicago markets for exhibition of firstrun films would be highly unlikely to

eliminate the anticompetitive effects of

this transaction. Manhattan and Chicago

are two of the most difficult markets in

the country to enter: Available theatre

sites are scarce, real estate and

construction costs are among the highest

in the nation, and acquiring the

necessary permits and approvals can be

difficult and time-consuming.

Identifying a site, planning the

development, and constructing a theatre

in Manhattan or Chicago takes several

years.

For all of these reasons, plaintiff has

concluded that the proposed transaction

would lessen competition substantially

in the exhibition of first-run films in

Manhattan and Chicago, eliminate

actual and potential competition

between Loews and Cineplex, and likely

result in increased ticket prices and

lower quality theatres in both

Manhattan and Chicago. The merger

would also likely reduce the rental fees

paid to distributors for films. The
25078 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

proposed merger therefore violates

Section 7 of the Clayton Act.

III. Explanation of the Proposed Final

Judgment

The proposed Final Judgment would

preserve existing competition in the

theatrical exhibition of first-run films in

both Manhattan and Chicago. It requires

the divestiture of 14 theatres in

Manhattan: 13 Cineplex theatres

(Chelsea, Chelsea West, 1st and 62nd,

Ziegfeld, Park & 86th Street, Waverly

Twin, Olympia, Art Greenwich, Metro

Twin, Beekman, Regency, 62nd &

Broadway, and 59th Street East) and one

Loews theatre (34th Street Showplace);

and 11 theatres in the Chicago area: 8

Cineplex Odeon theatres (600 North

Michigan, 900 North Michigan,

Biograph, Bricktown, Watertower 1–4,

Watertower 5–7, Burnham Plaza, and

Broadway) and 3 Loews theatres (Hyde

Park Quad, River Run Eightplex, and

Old Orchard Quad). The divested

theatres constitute slightly more in box

office revenue in Manhattan and in

Chicago than the leading firm is

acquiring in each market and, as a

result, will reduce the leading firm’s

share back to (or actually slightly less

than) pre-merger levels in both markets.

The divestitures will preserve choices

for distributors and movie-goers and

make it less likely that ticket prices will

increase, rental fees paid to distributors

will decrease, and theatre quality will

decline in Manhattan and Chicago as a

result of the transaction.

Two of the divestitures in the Chicago

area are outside of the city limits: Old

Orchard Quad and the River Run

Eightplex. In a case like this, where

theatres are geographically

differentiated and consumers’

willingness to travel is varied, some

movie-goers near the border have

options outside the city limits.

Accordingly, we have negotiated relief

that includes two theatres outside of

Chicago. Both of these theatres are in

close proximity to the city, are near

major highways, and are in zones that

would be rendered non-competitive by

the merger.

Unless the United States grants an

extension of time, the divestitures must

be completed within one-hundred and

eighty (180) calendar days after the

filing of the Complaint in this matter or

five (5) days after notice of the entry of

this Final Judgment by the Court,

whichever is later. Until the divestitures

take place, Loews and Cineplex must

maintain and operate the 25 theatres to

be divested as active competitors,

maintain the management, staffing,

sales, and marketing of the theatres, and

maintain the theatres in operable

condition at current capacity

configurations.

The divestitures must be to a

purchaser or purchasers acceptable to

the United States in its sole discretion,

after consultation with the State of New

York or the State of Illinois as

appropriate. Unless the United States

otherwise consents in writing, the

divestitures shall include all the assets

of the theatres being divested, and shall

be accomplished in such a way as to

satisfy the United States that such assets

can and will be used as viable, ongoing

first-run theatres.

If defendants fail to divest these

theatres within the time periods

specified in the Final Judgment, the

Court, upon application of the United

States, is to appoint a trustee nominated

by the United States to effect the

divestitures. If a trustee is appointed,

the proposed Final Judgment provides

that Loews and Cineplex will pay all

costs and expenses of the trustee and

any professionals and agents retained by

the trustee. The compensation paid to

the trustee and any persons retained by

the trustee shall be both reasonable in

light of the value of the theatres

remaining to be divested, and based on

a fee arrangement providing the trustee

with an incentive based on the price

and terms of the divestitures and the

speed with which they are

accomplished. After appointment, the

trustee will file monthly reports with

the parties and the Court, setting for the

trustee’s efforts to accomplish the

divestitures ordered under the proposed

Final Judgment. If the trustee has not

accomplished the divestitures 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 divestitures, (2) the reasons, in

the trustee’s judgment, why the required

divestitures have not been

accomplished and (3) the trustee’s

recommendations. At the same time the

trustee will furnish such report to the

plaintiff and defendants, who will each

have the right to be heard and to make

additional recommendations.

The proposed Final Judgment also

prohibits the defendants from acquiring

any other threatres in Manhattan or

Cook County, Illinois without providing

at least thirty (30) days’ notice to the

U.S. Department of Justice. Such

acquisitions could raise competitive

concerns but might be too small to be

reported otherwise under the Hart-ScottRodino (‘‘HSR’’) premerger notification

statute.

IV. Remedies Available to Potential

Private Litigants

Section 4 of the Clayton Act, 15

U.S.C. 15, provides that any person who

has been injured as a result of conduct

prohibited by the antitrust laws may

bring suite in federal court to recover

three times the damages the person has

suffered, as well as costs and reasonable

attorney’s fees. Entry of the proposed

Final Judgment will neither impair nor

assist the bringing of any private

antitrust damage action. Under the

provisions of Section 5(a) of the Clayton

Act, 15 U.S.C. 16(a), the proposed Final

Judgment has no prima facie effect in

any subsequent private lawsuit that may

be brought against defendants.

V. Procedures Available for

Modification of the Proposed Final

Judgment

The parties have stipulated that the

proposed Final Judgment may be

entered by the Court after compliance

with the provisions of the APPA,

provided that plaintiff United States has

not withdrawn its consent. The APPA

conditions entry upon the Court’s

determination that the proposed Final

Judgment is in the public interest.

The APPA provides a period of at

least sixty (60) days preceding the

effective date of the proposed Final

Judgment within which any person may

submit to the plaintiff written comments

regarding the proposed Final Judgment.

Any person who wishes to comment

should do so within sixty (60) days of

the date of publication of this

Competitive Impact Statement in the

Federal Register. The plaintiff will

evaluate and respond to the comments.

All comments will be given due

consideration by the U.S. Department of

Justice, which remains free to withdraw

its consent to the proposed Final

Judgment at any time prior to entry. The

comments and the response of the

plaintiff will be filed with the Court and

published in the Federal Register.

Written comments should be

submitted to: Craig W. Conrath, Chief,

Merger Task Force, Antitrust Division,

United States Department of Justice,

1401 H Street, NW; Suite 4000,

Washington, DC 20530.

The proposed Final Judgment

provides that the Court retains

jurisdiction over this action, and that

the parties may apply to the Court for

any order necessary or appropriate for

the modification, interpretation or

enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final

Judgment

Plaintiff United States considered, as

an alternative to the proposed Final
Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices 25079

1 119 Cong. Rec. 24598 (1973). See United States

v. Gillette Co., 406 F. Supp. 713, 715 (D. Mass.

1975). A ‘‘public interest’’ determination can be

made properly on the basis of the Competitive

Impact Statement and Response to Comments filed

pursuant to the APPA. Although the APPA

authorizes the use of additional procedures, 15

U.S.C. 16(f), those procedures are discretionary. A

court need not invoke any of them unless it believes

that the comments have raised significant issues

and that further proceedings would aid the court in

resolving those issues. See H.R. Rep. 93–1463, 93rd

Cong. 2d Sess. 8–9 (1974), reprinted in U.S.C.C.A.N.

6535, 6538.

2Bechtel., 648 F.2d at 666 (citations omitted)

(emphasis added); See BNS, 858 F.2d at 463; United

States v. National Broadcasting Co., 449 F. Supp.

1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. Supp.

at 716. See also Microsoft, 56 F.3d at 1461 (whether

‘‘the remedies [obtained in the decree are] so

inconsonant with the allegations charged as to fall

outside of the ‘reaches of the public interest’ ’’)

(citations omitted).

3United States v. American Tel. and Tel. Co., 552

F. Supp. 131, 151 (D.D.C. 1982), aff’d. sub nom.

Maryland v. United States, 460 U.S. 1001 (1983),

quoting Gillette Co., 406 F. Supp. at 716 (citations

omitted); United States v. Alcan Aluminum, Ltd.,

605 F. Supp. 619, 622 (W.D. Ky. 1985).

Judgment, a full trial on the merits of its

Complaint against defendants. Plaintiff

is satisfied, however, that the divestiture

of the Manhattan theatre assets and the

Chicago theatre assets and other relief

contained in the proposed Final

Judgment will preserve viable

competition in the first-run exhibition

of motion pictures in Manhattan and

Chicago. Thus, the proposed Final

Judgment would achieve the relief the

government might have obtained

through litigation, but avoids the time,

expense and uncertainty of a full trial

on the merits of the Complaint.

VII. Standard of Review Under the

APPA for Proposed Final Judgment

The APPA requires that proposed

consent judgments in antitrust cases

brought by the United States be subject

to a sixty (60) day comment period, after

which the Court shall determine

whether entry of the proposed Final

Judgment ‘‘is in the public interest.’’ In

making that determination, the Court

may consider—

(1) The competitive impact of such

judgment, including termination of alleged

violations, provisions for enforcement and

modification, duration or relief sought,

anticipated effects of alternative remedies

actually considered and any other

considerations bearing upon the adequacy of

such judgment;

(2) The impact of entry of such judgment

upon the public generally and individuals

alleging specific injury from the violations

set forth in the complaint including

consideration of the public benefit, if any, to

be derived from a determination of the issues

at trial.

15 U.S.C. 16(e).

As the United States Court of Appeals

for the D.C. Circuit held, this statute

permits a court to consider, among other

things, the relationship between the

remedy secured and the specific

allegations set forth in the government’s

complaint, whether the decree is

sufficiently clear, whether enforcement

mechanisms are sufficient and whether

the decree may positively harm third

parties. See United States v. Microsoft,

56 F.3d 1448, 1461–62 (D.C. Cir. 1995).

In conducting this inquiry, ‘‘[t]he

Court is nowhere compelled to go to

trial or to engage in extended

proceedings which might have the effect

of vitiating the benefits of prompt and

less costly settlement through the

consent decree process.’’1 Rather,

[a]bsent a showing of corrupt failure of the

government to discharge its duty, the Court,

in making its public interest finding, should

* * * carefully consider the explanations of

the government in the competitive impact

statement and its responses to comments in

order to determine whether those

explanations are reasonable under the

circumstances.

United States v. Mid-America

Dairymen, Inc., 1977–1 Trade Cas.

¶ 61,508. at 71, 980 (W.D. Mo. 1977).

Accordingly, with respect to the

adequacy of the relief secured by the

decree, a court may not ‘‘engage in an

unrestricted valuation of what relief

would best serve the public.’’ United

States v. BNS, Inc., 858 F.2d 456, 462

(9th Cir. 1988), Citing United States v.

Bechtel Corp., 648 F.2d 660, 666 (9th

Cir.), cert. denied, 454 U.S. 1083 (1981);

see also Microsoft, 56 F.3d at 1460–62.

Precedent requires that,

the balancing of competing social and

political interests affected by a proposed

antitrust consent decree must be left, in the

first instance, to the discretion of the

Attorney General. The court’s role in

protecting the public interest is one of

insuring that the government has not

breached its duty to the public in consenting

to the decree. The court is required to

determine not whether a particular decree is

the one that will best serve society, but

whether the settlement is ‘‘within the reaches

of the public interest.’’ More elaborate

requirements might undermine the

effectiveness of antitrust enforcement by

consent decree.2

The proposed Final Judgment,

therefore, should not be reviewed under

a standard of whether it is certain to

eliminate every anticompetitive effect of

a particular practice or whether it

mandates certainty of free competition

in the future. Court approval of a final

judgment requires a standard more

flexible and less strict than the standard

required for a finding of liability. ‘‘[A]

proposed decree must be approved even

if it falls short of the remedy the court

would impose on its own, as long as it

falls within the range of acceptability or

is ‘within the reaches of public

interest.’ ’’3

This is strong and effective relief that

should fully address the competitive

harm posed by the proposed

transaction.

VIII. Determinative Documents

There are no determinative materials

or documents within the meaning of the

APPA that were considered by the

plaintiff in formulating the proposed

Final Judgment.

Dated: April 16, 1998.

Respectifully submitted,

Allen P. Grunes (AG 4775),

U.S. Department of Justice, Antitrust

Division, 1401 H. Street, NW.; Suite

4000, Washington, D.C. 20530, (202)

307–0001, Attorney for Plaintiff the

United States.

Exhibit A Definition of HHI and

Calculations for Market

‘‘HHI’’ means the HerfindahlHirschman Index, a commonly accepted

measure of market concentration. It is

calculated by squaring the market share

of each firm competing in the market

and then summing the resulting

numbers. For example, for a market

consisting of four firms with shares of

thirty, thirty, twenty and twenty

percent, the HHI is 2600 302 + 302 + 202

+ 202=2600). The HHI takes into account

the relative size and distribution of the

firms in a market and approaches zero

when a market consists of a large

number of firms of relatively equal size.

The HHI increases both as the number

of firms in the market decreases and as

the disparity in size between those firms

increases.

Markets in which the HHI is between

1000 and 1800 points are considered to

be moderately concentrated, and those

in which the HHI is in excess of 1800

points are considered to be

concentrated. Transactions that increase

the HHI by more than 100 points in

concentrated markets presumptively

raise antitrust concerns under the

Merger Guidelines. See Merger

Guidelines § 1.51.

Certificate of Service

I, Allen P. Grunes, hereby certify that

on April 16, 1998, I caused the foregoing

document to be served on defendants by

having a copy mailed, first-class,

postage prepaid, to:

Ira S. Sacks,

Fried, Frank, Harris, Shriver & Jacobson, One

New York Plaza, New York, NY 10004, (212)

859–8000.
25080 Federal Register / Vol. 63, No. 87 /Wednesday, May 6, 1998 / Notices

Attorney for defendants Sony Corporation

of America and LTM Holdings, Inc.

Alan J. Weinschel,

Weil, Gotshal & Manges LLP, 767 Fifth

Avenue, New York, NY 10153, (212) 310–

8000.

Attorney for defendant Cineplex Odeon

Corporation.

Kenneth R. Logan,

Simpson Thacher & Bartlett, 425 Lexington

Avenue, New York, NY 10017, (212) 455–

2000.

Attorney for defendant J.E. Seagram Corp.

Allen P. Grunes.

[FR Doc. 98–11958 Filed 5–5–98; 8:45 am]

BILLING CODE 4410–11–M

DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

[INS No. 1918–98]

English Language, American History

and Civics, Standardized

Naturalization Test

AGENCY: Immigration and Naturalization

Service, Justice.

ACTION: Notice.

SUMMARY: This notice announces the

termination of the Immigration and

Naturalization Service (Service)

Standardized Citizenship Testing

Program, currently conducted by five

non-government companies on behalf of

the Service. The program, established

under a 1991 Notice of Program in the

Federal Register, will end at midnight

on August 30, 1998. After the August 30

termination date, the Service will

commence citizenship testing at the

newly opened Application Support

Centers as part of the ongoing effort to

re-engineer and streamline the entire

naturalization process.

DATES: The Citizenship Testing Program

will terminate effective at midnight,

Eastern Daylight Time, August 30, 1998.

FOR FURTHER INFORMATION CONTACT:

Craig Howie, Immigration and

Naturalization Service, Office of

Naturalization Operations, 801 I Street,

NW., Suite 900, Washington, DC 20536.

Telephone: (202) 305–0539.

SUPPLEMENTARY INFORMATION:

What Is the Standard Citizenship

Testing Program?

The Service established a

standardized citizenship testing

program pursuant to a Notice of

Program published in the Federal

Register on June 28, 1991, at 56 FR

29714–15. The program’s model was

similar to the testing program used with

Legalization applicants as provided in

section 254A(b)(1)(D) of the Immigration

and Nationality Act (the Act). The

citizenship testing program was

designed to facilitate the naturalization

of persons who otherwise might be

hesitant to apply for naturalization.

Section 312 of the Act requires most

applicants for naturalization to

demonstrate a basic understanding of

the English language and an

understanding of United States history

and government. Traditionally,

applicants are tested on English and

United States history and government as

part of the mandatory naturalization

interview. The 1991 Notice established

criteria that non-government

organizations were required to meet in

order to be authorized to conduct

citizenship testing on behalf of the

Service. These criteria included

requirements for the administration of a

multiple choice test on United States

history, government, and written

English. Naturalization applicants who

take and pass one of these tests

normally are not questioned on these

topics during the mandatory

naturalization interview before an

officer of the Service.

Since publication of the 1991 Notice,

the Service approved six national

organizations to administer citizenship

tests. Five national organizations

currently are administering citizenship

tests through networks of local testing

centers across the United States. The

Service has no contractual or financial

ties with any of the companies

authorized to conduct citizenship

testing.

Why Has the Service Decided To

Terminate the Current Testing

Program?

The Service has been engaged in a

complete re-engineering of the

naturalization process. Part of this

process involves developing new

methods for applicants to demonstrate

compliance with various naturalization

requirements under the Act. For

example, last year the Service embarked

upon a new method for applicant

fingerprinting. Fingerprints for all

Service applications or petitions are

now taken at Application Support

Centers (ASCs). The Service now plans

to commence citizenship testing at the

ASCs so that applicants may fulfill these

particular requirements at one time,

with one visit. The Service anticipates

publishing a proposed rule in the

Federal Register later this year,

outlining our regulatory proposal for

citizenship testing at the ASCs. The

authority for this decision to end the

current testing program is found in

section 332(a) of the Act which

authorizes the Service to determine an

applicant’s admissibility to citizenship.

How Long Will Testing Certificates

Issued by the Current Testing

Organizations Be Valid?

The Service will allow the current

testing organizations to continue

administering tests through midnight,

Eastern Daylight Time, August 30, 1998.

Test certificates issued noting a testing

date on or before August 30, 1998, will

be honored in accordance with Service

regulations found at 8 CFR 312.3(a)(1).

For example, an applicant who is tested

on August 30, 1998, passes, and is

issued a certificate, has until August 30,

1999, to file an N–400, Application for

Naturalization, in order for the

certificate to be honored. If the

applicant has already filed an N–400

and is awaiting an interview, the

certificate will be valid until a final

determination on the application has

been made, regardless of how long the

time period is between the date of the

test and the date of the final

determination on the application.

Service officers interviewing

naturalization applicants will retest

persons presenting certificates only if

the officer has reason to believe that the

certificate was either fraudulently

issued or otherwise inappropriately

granted. While not a requirement, the

Service urges all applicants desiring to

be tested by the current testing

organizations to submit a copy of the

passing certification as an attachment to

the N–400 at the time of filing, and to

bring the original certificate to the

naturalization interview.

Dated: April 15, 1998.

Doris Meissner,

Commissioner, Immigration and

Naturalization Service.

[FR Doc. 98–12004 Filed 5–5–98; 8:45 am]

BILLING CODE 4410–10–M

DEPARTMENT OF JUSTICE

Office of Justice Programs

Office for Victims of Crime; Agency

Information Collection Activities:

Proposed Collection; Comment

Request

ACTION: Notice of Information Collection

Under Review; Reinstatement, with

change, of a previously approved

collection for which approval has

expired; Victims of Crime Act, Victim

Compensation Grant Program, State

Performance Report.

This proposed information collection

is published to obtain comments from