Source: https://www.federalregister.gov/documents/2019/09/16/2019-19919/united-states-v-third-point-offshore-fund-ltd-et-al-proposed-final-judgment-and-competitive-impact
Timestamp: 2020-04-09 21:27:36
Document Index: 150755987

Matched Legal Cases: ['§ 18', '§ 18', '§ 1331', '§ 12', '§18', '§ 12', '§18', '§ 18', '§ 18', '§ 801', '§ 801', '§ 801', '§ 801', '§ 801', '§ 801', '§ 802', '§ 18', '§ 701', '§ 2461', '§ 1', '§ 18', '§ 18', '§ 18', '§ 701', '§ 2461', '§ 1', '§ 18', '§ 18', '§ 18', '§ 801', '§ 801', '§ 801', '§ 230', '§ 77', '§ 230', '§ 18', '§ 701', '§ 1', '§ 2461', '§ 1', '§ 16', '§ 16', '§ 18', '§ 18']

Federal Register :: United States v. Third Point Offshore Fund, Ltd., et al.: Proposed Final Judgment and Competitive Impact Statement
United States v. Third Point Offshore Fund, Ltd., et al.: Proposed Final Judgment and Competitive Impact Statement
A Notice by the Antitrust Division on 09/16/2019
August 28, 2019 Respectfully submitted,
48639-48647 (9 pages)
COMPLAINT FOR CIVIL PENALTIES AND INJUNCTIVE RELIEF FOR FAILURE TO COMPLY WITH THE PREMERGER REPORTING AND WAITING REQUIREMENTS OF THE HART-SCOTT RODINO ACT
https://www.federalregister.gov/d/2019-19919 https://www.federalregister.gov/d/2019-19919
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 Competitive Impact Statement have been filed with the United States District Court for the District of Columbia in United States of America v. Third Point Offshore Fund, Ltd., et al., Civil Action No. 1:19-cv-02593. On August 28, 2019, the United States filed a Complaint alleging that Third Point Offshore Fund, Ltd., Third Point Ultra Ltd., Third Point Partners Qualified L.P., and Third Point LLC violated the notice and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a (“HSR Act”), with respect to their acquisition of voting securities of DowDuPont Inc. The proposed Final Judgment, filed at the same time as the Complaint, requires the defendants to pay a civil penalty of $609,810 and be subject to an injunction prohibiting the defendants from undertaking similar acquisitions without complying with notification and waiting period requirements of the HSR Act.
Public comment is invited within 60 days of the date of this notice. Such comments, including the name of the submitter, and responses thereto, will be posted on the Antitrust Division's website, filed with the Court, and, under certain circumstances, published in the Federal Register. Comments should be directed to Kenneth A. Libby, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580 (telephone: (202)326-2694; email: klibby@ftc.gov).
United States of America, 450 Fifth Street NW, Washington, DC 20530, Plaintiff, v. Third Point Offshore Fund, LTD., c/o Cayman Corporate Center, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands, Third Point Ultra LTD., c/o Maples Corporate Services (BVI) Ltd., Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands, Third Point Partners Qualified L.P., Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and, Third Point LLC, 390 Park Avenue, 19th Floor, New York, NY 10022, Defendants.
Civil Action No. 1:19-cv-02593-CJN
The United States of America, Plaintiff, by its attorneys, acting under the direction of the Attorney General of the United States and at the request of the Federal Trade Commission, brings this civil antitrust action to obtain monetary relief in the form of civil penalties and injunctive relief against Defendants Third Point Offshore Fund, Ltd. (“Third Point Offshore”), Third Point Ultra Ltd. (“Third Point Ultra”), Third Point Partners Qualified L.P. (“Third Point Partners”) (collectively, “Defendant Funds”) and Third Point LLC (collectively with Defendant Funds, “Defendants”). Plaintiff alleges as follows:
1. The Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a (“HSR Act” or “Act”) is an essential part of modern antitrust enforcement. It requires the buyer and the seller of voting securities or assets in excess of a certain value to notify the Department of Justice and the Federal Trade Commission and to observe a waiting period prior to consummating the acquisition. This waiting period provides the federal antitrust agencies with an opportunity to investigate and to seek an injunction to prevent the consummation of acquisitions that are likely to be anticompetitive.Start Printed Page 48640
2. Each Defendant Fund violated the HSR Act's notice and waiting requirements when it acquired voting securities of DowDuPont Inc. (“DowDuPont”) on August 31, 2017, as a result of the consolidation of Dow Chemical Company (“Dow”) and E.I du Pont de Nemours and Company (“DuPont”).
3. The Court should assess an appropriate civil penalty and injunctive relief for these violations of the HSR Act's requirements.
4. This Court has jurisdiction over Defendants and over the subject matter of this action pursuant to Section 7A(g) of the Clayton Act, 15 U.S.C. § 18a(g), and pursuant to 28 U.S.C. §§ 1331, 1337(a), 1345, and 1355, and over Defendants by virtue of Defendants' consent, in the Stipulation relating hereto, to the maintenance of this action and entry of the Final Judgment in this District.
5. Venue is properly based in this District by virtue of Defendants' consent, in the Stipulation relating hereto, to the maintenance of this action and entry of the Final Judgment in this District.
6. Defendant Third Point Offshore is an offshore fund organized under the laws of the Cayman Islands with its registered office at Walkers Corporate Limited, Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.
7. Defendant Third Point Ultra is an offshore fund organized under the laws of the British Virgin Islands with its registered office at Maples Corporate Services (BVI) Ltd., Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands. The Investment Manager of Defendant Third Point Ultra has its office at 390 Park Avenue, 19th Floor, New York, NY 10022.
8. Defendant Third Point Partners is a limited partnership organized under the laws of the State of Delaware, with its principal place of business at Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801.
9. Defendant Third Point LLC is a limited liability company organized under the laws of the State of Delaware, with its principal place of business at 390 Park Avenue, 19th Floor, New York, NY 10022. Defendant Third Point LLC makes all the investment decisions on behalf of the Defendant Funds, including deciding whether to file notifications pursuant to the HSR Act and preparing the notification forms on behalf of each of the Defendant Funds.
10. Defendants are engaged in commence, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C. § 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. §18a(a)(1). At all times relevant to this Complaint, each Defendant had total assets in excess of $16.2 million.
11. DowDupont is a corporation organized under the laws of the State of Delaware with its principal place of business at 2030 Dow Center, Midland, MI 48674. DowDuPont is engaged in commerce, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C. § 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. §18a(a)(1). At all times relevant to this Complaint, DowDuPont had annual net sales in excess of $161.5 million.
12. The HSR Act requires certain acquiring persons and certain persons whose voting securities or assets are acquired to file notifications with the federal antitrust agencies and to observe a waiting period before consummating certain acquisitions of voting securities or assets. 15 U.S.C. § 18a(a) and (b). The HSR Act's notification and waiting period requirements are intended to give the federal antitrust agencies prior notice of, and information about, proposed transactions. The waiting period is intended to provide the federal antitrust agencies with an opportunity to investigate a proposed transaction and to determine whether to seek an injunction to prevent the consummation of a transaction that may violate the antitrust laws.
13. The HSR Act's notification and waiting period requirements apply to acquisitions that meet the HSR Act's thresholds, which are adjusted annually. During the period of 2017 relevant to this Complaint, the HSR Act's reporting and waiting period requirements applied to transactions that would result in the acquiring person holding more than $80.8 million of voting securities, non-corporate interests, or assets, if certain size of person tests were met, except for certain exempted transactions.
14. Pursuant to Section 7A(d)(2) of the HSR Act, 15 U.S.C. § 18a(d)(2), the Federal Trade Commission promulgated rules to carry out the purpose of the HSR Act. 16 C.F.R. §§ 801-03 (“HSR Rules”). The HSR Rules, among other things, define terms contained in the HSR Act.
15. Section 801.2(a) of the HSR Rules, 16 C.F.R. § 801.2(a), provides that “[a]ny person which, as a result of an acquisition, will hold voting securities” is deemed an “acquiring person.”
16. Section 801.1(a)(1) of the HSR Rules, 16 C.F.R. § 801.1(a)(1), provides that the term “person” means “an ultimate parent entity and all entities which it controls directly or indirectly.”
17. Section 801.1(a)(3) of the HSR Rules, 16 C.F.R. § 801.1(a)(3), provides that the term “ultimate parent entity” means “an entity which is not controlled by any other entity.”
18. Section 801.2(d)(1)(i) of the HSR Rules, 16 C.F.R. § 801.2(d)(1)(i), provides that “mergers and consolidations are transactions subject to the act and shall be treated as acquisitions of voting securities.”
19. Section 801.13(a) of the HSR Rules, 16 C.F.R. § 801.13(a), provides that “all voting securities of the issuer which will be held by the acquiring person after the consummation of an acquisition shall be deemed voting securities held as a result of the acquisition.”
20. Section 802.21 of the HSR Rules, 16 C.F.R. § 802.21, provides that, when a person files under the HSR Act to acquire voting securities from an issuer and observes the waiting period, that person may acquire additional voting securities of the same issuer for five years after the end of the waiting period so long as it does not exceed any higher threshold as a result of the combined purchases.
21. Section 7A(g)(1) of the Clayton Act, 15 U.S.C. § 18a(g)(1), provides that any person, or any officer, director, or partner thereof, who fails to comply with any provision of the HSR Act is liable to the United States for a civil penalty for each day during which such person is in violation. For violations occurring on or after November 2, 2015, and assessed after August 1, 2016, the maximum amount of civil penalty is $40,000 per day, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74, § 701 (further amending the Federal Civil Penalty Inflation Adjustment Act of 1990, 28 U.S.C. § 2461 note), and Federal Trade Commission Rule 1.98, 16 C.F.R. § 1.98, 81 Fed. Reg. 42,476 (June 30, 2016). As of January 22, 2018, the maximum penalty amount was further increased to $41,484 per day for civil penalties assessed after that date. 83 Fed. Reg. 2903 (Jan. 22, 2018).
22. Section 7A(g)(2) of the Clayton Act, 15 U.S.C. § 18a(g)(2), provides that if any person fails substantially to comply with the notification requirement under the HSR Act, a Start Printed Page 48641district court may grant such equitable relief as the court in its discretion determines necessary or appropriate, upon application of the Federal Trade Commission or the Assistant Attorney General.
23. Plaintiff alleges and incorporates paragraphs 1 through 22 as if set forth fully herein.
24. On December 11, 2015, Dow and DuPont entered into a Merger Agreement pursuant to which Dow and DuPont would consolidate into a single company, to be called DowDuPont.
25. On June 10, 2106, Dow and DuPont issued their Final Proxy Statement/Prospectus for the consolidation. That document disclosed that, upon completion of the transaction, Dow and DuPont would cease to have their common stock publicly traded and that shareholders would own shares in DowDuPont and would not directly own any shares of Dow or DuPont.
26. On June 15, 2017, Dow and DuPont issued a joint press release stating that they had received antitrust clearance from the U.S. Department of Justice and that the transaction was on track to close in August 2017.
27. On August 4, 2017, Dow and DuPont issued a joint press release setting a closing date of August 31, 2017 for the transaction. The press release also stated that shares of Dow and DuPont would cease trading at the close of the New York Stock Exchange on August 31 and shares of DowDuPont will begin trading on September 1, 2017.
28. As of August 31, 2017, Defendant Third Point Offshore held 6,446,300 voting securities of Dow, Defendant Third Point Ultra held 4,376,813 voting securities of Dow, and Defendant Third Point Partners held 2,540,700 voting securities of Dow.
29. On August 31, 2017, Dow and DuPont completed the consolidation pursuant to the Merger Agreement of December 11, 2015, as amended on March 31, 2017. As a result of the consolidation, all holders of Dow and DuPont voting securities received voting securities of DowDuPont.
30. On August 31, 2017, each Defendant Fund received voting securities of DowDuPont valued in excess of $80.8 million. Defendant Third Point Offshore acquired 6,446,300 voting securities of DowDuPont valued at approximately $429.6 million. Defendant Third Point Ultra acquired 4,376,813 voting securities of DowDuPont valued at approximately $291.7 million. Defendant Third Point Partners acquired 2,540,700 voting securities of DowDuPont valued at approximately $169.3 million.
31. Each Defendant Fund is its own ultimate parent entity within the meaning of the HSR Rules and had its own obligation to comply with the notification and waiting period requirements of the HSR Act and the HSR Rules.
32. The transactions described in Paragraph 30 were subject to the notification and waiting periods of the HSR Act and the HSR Rules. The HSR Act and HSR Rules in effect during the time period relevant to this proceeding required that each Defendant Fund file a notification and report form with the Department of Justice and the Federal Trade Commission and observe a waiting period before acquiring and holding an aggregate total amount of voting securities of DowDuPont in excess of $80.8 million.
33. Previously, on April 7, 2014, each Defendant Fund had filed under the HSR Act to acquire voting securities of Dow and had observed the waiting period. Section 802.21 of the HSR Rules does not exempt the Defendant Funds' acquisitions of DowDuPont voting securities because DowDuPont is not the same issuer as Dow within the meaning of the HSR Rules. Among other things, for example, DowDuPont competes in additional lines of business from those in which Dow competed.
34. Although required to do so, each Defendant Fund failed to file and observe the waiting period prior to acquiring DowDuPont voting securities.
35. Defendant Third Point LLC had the power and authority to file a notification under the HSR Act on behalf of each of the Defendant Funds.
36. On November 8, 2017, each Defendant Fund filed a notification and report form under the HSR Act with the Department of Justice and the Federal Trade Commission reflecting their acquisitions of DowDuPont voting securities. The waiting period relating to these filings expired on December 8, 2017.
37. Each Defendant Fund was in violation of the HSR Act each day during the period beginning on August 31, 2017, and ending on December 8, 2017.
38. Defendants are currently under a court decree, also in the District Court of the District of Columbia, resulting from allegations that they previously violated the HSR Act in connection with acquisitions of voting securities of Yahoo! Inc. (“Yahoo”). Specifically, on August 24, 2015, the United States filed a complaint for equitable relief alleging that Defendants' acquisitions of Yahoo voting securities in August and September of 2011 violated the HSR Act. At the same time, the United States filed a Stipulation signed by Defendants and a proposed Final Judgment that included provisions imposing certain injunctive relief against Defendants, including the requirement that Defendants maintain a compliance program. That Final Judgment was entered by that court on December 18, 2015. U.S. v. Third Point Offshore Fund, Ltd., et al., Case 1:15-CV-01366.
1. That the Court adjudge and decree that each Defendant Fund violated the HSR Act, 15 U.S.C. § 18a, as alleged in this Complaint and that each Defendant Fund was in violation of the Act on each day of the period from August 31, 2017, through December 8, 2017;
2. That the Court order each Defendant Fund to pay to the United States an appropriate civil penalty as provided by the HSR Act, 15 U.S.C. § 18a(g)(1), the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74, § 701 (further amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461 note), and Federal Trade Commission Rule 1.98, 16 C.F.R. § 1.98, 84 FR 3980 (Feb. 14, 2019);
3. That the Court adjudge and decree that Defendant Third Point LLC had the power and authority to prevent the violations by the Defendant Funds and that relief against Third Point LLC is necessary and appropriate in order to ensure future compliance with the HSR Act by the Defendant Funds;
4. That the Court issue an appropriate injunction preventing future violations by Defendants as provided by the HSR Act, 15 U.S.C. § 18a(g)(2);
5. That the Court order such other and further relief as the Court may deem just and proper; and
6. That the Court award the Plaintiff its costs of this suit.
Dated: 8/28/19
Assistant Attorney General, Department of Justice, Antitrust Division, Washington, DC 20530.
United States of America, Plaintiff, v. Third Point Offshore Fund, LTD., Third Point Ultra LTD., Third Point Partners Qualified L.P., and Third Point LLC, Defendants.
WHEREAS, the United States of America filed its Complaint on August 28, 2019, alleging that Defendants Third Point Offshore Fund, Ltd., Third Point Ultra Ltd., and Third Point Partners Qualified L.P. (collectively, “Third Point Funds” or “Defendant Funds”) violated Section 7A of the Clayton Act (15 U.S.C. § 18a, commonly known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”)), and the United States and Defendants Third Point Funds and Third Point LLC (collectively, “Defendants”), 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 any admission by, any party regarding any such issue of fact or law;
NOW, THEREFORE, before any testimony is taken, and without trial or adjudication of any issue of fact or law, and upon the consent of the parties, it is ORDERED, ADJUDGED AND DECREED;
This Court has jurisdiction over the subject matter of this action. The Defendants consent solely for the purpose of this action and the entry of this Final Judgment that this Court has jurisdiction over each of the parties to this action and that the Complaint states a claim upon which relief may be granted against Defendants under Section 7A of the Clayton Act, as amended (15 U.S.C. § 18a).
(A) “Consolidation” shall have the meaning of “consolidation” as used in 16 C.F.R. § 801.2.
(B) “Consolidated Issuer” means an Issuer that is formed by a Consolidation.
(C) “De Minimis Exemption” means a modification to the HSR Act or any Regulation thereunder that exempts from the reporting and waiting requirements of the HSR Act the acquisition of Voting Securities of an Issuer by any Acquiring Person, or by an Acquiring Person that is not a competitor of the Issuer or that otherwise meets specified criteria, on the basis that the acquisition results in the Acquiring Person's holding not more than, or less than, a specified percentage of the outstanding Voting Securities of the Issuer.
(D) “Issuer” means a legal entity that issues Voting Securities.
(E) “Person” means any natural person.
(F) “Regulation” shall mean any rule, regulation, statement, or interpretation under the HSR Act that has legal effect with respect to the implementation or application of the HSR Act or any section within 16 C.F.R. §§ 801-803.
(G) “Third Point LLC” means Defendant Third Point LLC, a limited liability company organized under the laws of the State of Delaware, with its principal place of business at 390 Park Avenue, 19th Floor, New York, NY 10022; its successors and assigns; and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
(H) “Third Point Offshore Fund, Ltd.” means Defendant Third Point Offshore Fund, Ltd., an exempted company organized under the laws of the Cayman Islands, with its registered office at Walkers Corporate Limited, Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands; its successors and assigns; and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
(I) “Third Point Partners Qualified L.P.” means Defendant Third Point Partners Qualified L.P., a limited partnership organized under the laws of the State of Delaware, with its registered address at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801; its successors and assigns; and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
(J) “Third Point Ultra Ltd.” means Defendant Third Point Ultra Ltd., an international business company organized under the laws of the British Virgin Islands, with its registered office at Maples Corporate Services (BVI) Ltd., Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands; its successors and assigns; and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
(K) Other capitalized terms have the meanings as defined in the HSR Act and Regulations promulgated thereunder, 16 C.F.R. §§ 801-803.
(A) This Final Judgment applies to all Defendants, as defined above, and to all other Persons and entities who are in active concert or participation with any of the foregoing with respect to conduct prohibited in Paragraph IV when the relevant Persons or entities have received actual notice of this Final Judgment by personal service or otherwise.
(B) Pursuant to Rule 506(d)(2)(iii), 17 C.F.R. § 230.506(d)(2)(iii), as promulgated under the Securities Act of 1933, 15 U.S.C. § 77a, et seq., disqualification under paragraph (d)(1) of Rule 506, 17 C.F.R. § 230.506(d)(1), shall not arise as a consequence of the entry of this Final Judgment or of the entry of any other order or judgment in this action.
Each Defendant is enjoined from acquiring Voting Securities of a Consolidated Issuer in exchange for Voting Securities of any Issuer that was a party to the Consolidation when:
(A) The acquisition of the Voting Securities of the Consolidated Issuer would meet the notification requirements of the HSR Act;
(B) Defendant's acquisition of such Voting Securities would not be exempt from the reporting and waiting requirements of the HSR Act; and
(C) Defendant has not fulfilled the reporting and waiting requirements of the HSR Act with respect to the acquisition of such Voting Securities.
(A) Judgment is hereby entered in this matter in favor of Plaintiff and against the Defendants and, pursuant to Section 7A(g)(1) of the Clayton Act, 15 U.S.C. § 18a(g)(1), and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, Pub. L. 114-74 § 701, codified at 28 U.S.C. § 1 (amending the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L. 101-410 (codified at 28 U.S.C. § 2461 note)), and Federal Trade Commission Rule 1.98, 16 C.F.R. § 1.98, 81 Fed. Reg. 42, 476 (June 30, 2016), Defendant Funds are hereby ordered, jointly and severally, to pay a single civil penalty in the amount of six hundred nine thousand, eight hundred ten dollars and no cents ($609,810.00). Payment of the civil penalty ordered hereby shall be made by wire transfer of Start Printed Page 48643funds or cashier's check. If the payment is made by wire transfer, Defendant Funds shall contact Janie Ingalls of the Antitrust Division's Antitrust Documents Group at (202) 514-2481 for instructions before making the transfer. If the payment is made by cashier's check, the check shall be made payable to the United States Department of Justice and delivered to:
(B) Defendant Funds shall pay the full amount of the civil penalty within thirty (30) days of entry of this Final Judgment. In the event of a default or delay in payment, interest at the rate of 18 percent per annum shall accrue thereon from the date of the default or delay to the date of payment.
(A) For the purpose of determining or securing compliance with this Final Judgment, and subject to any legally recognized privilege, duly authorized representatives of the United States, including agents and consultants retained by the United States, shall, upon written request of a duly authorized representative of the Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to Defendants, be permitted:
(2) to interview, either informally or on the record, Defendants' directors, officers, employees, agents, or other Persons, 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.
(B) Upon written request of a duly 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.
(C) No information or documents obtained by the means provided in this Final Judgment shall be divulged by the United States to any person other than an authorized representative of the executive branch of the United States or of the Federal Trade Commission, 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.
(D) 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) 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) 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).
(A) The United States retains and reserves all rights to enforce the provisions of this Final Judgment, including the right to seek an order of contempt from this Court. Defendants agree that in any civil contempt action, any motion to show cause, or any similar action brought by the United States regarding an alleged civil violation of this Final Judgment, the United States may establish a civil violation of the decree and the appropriateness of any remedy therefor by a preponderance of the evidence, and Defendants waive any argument that a different standard of proof should apply.
(B) The Final Judgment should be interpreted to give full effect to the procompetitive purposes of the antitrust laws, including the HSR Act and Regulations promulgated thereunder. Defendants agree that they may be held in contempt of, and that the Court may enforce, any provision of this Final Judgment that, as interpreted by the Court in light of these procompetitive principles and applying ordinary tools of interpretation, is stated specifically and in reasonable detail, whether or not it is clear and unambiguous on its face. In any such interpretation, the terms of this Final Judgment should not be construed against either party as the drafter.
(C) In any enforcement proceeding in which the Court finds that the Defendants have violated this Final Judgment, the United States may apply to the Court for a one-time extension of this Final Judgment, together with such other relief as may be appropriate. In connection with any successful effort by the United States to enforce this Final Judgment against a Defendant, whether litigated or resolved prior to litigation, that Defendant agrees to reimburse the United States for the fees and expenses of its attorneys, as well as any other costs including experts' fees, incurred in connection with that enforcement effort, including in the investigation of the potential violation.
Unless the Court grants an extension, this Final Judgment shall expire five (5) years from the date of its entry, except that:
(A) after three (3) years from the date of its entry, this Final Judgment may be terminated upon notice by the United States to the Court and Defendants that the civil penalty has been paid and that the continuation of the Final Judgment no longer is necessary or in the public interest; or
(B) if, during any part of the term of this Final Judgment, a De Minimis Exemption becomes legally effective, then this Final Judgment may be terminated only upon notice by the United States to the Court that the continuation of the Final Judgment no longer is necessary or in the public interest. It shall be in the sole discretion of the United States whether to seek such termination after receiving a request to do so from Defendants.
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 available to the public copies of this Final Judgment, the Competitive Impact Statement, any comments thereon, and Start Printed Page 48644the United States' responses to comments. Based upon the record before the Court, which includes the Competitive Impact Statement and any comments and responses to comments filed with the Court, entry of this Final Judgment is in the public interest.
Court approval subject to the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16
United States of America c/o Department of Justice, Plaintiff, v. Third Point Offshore Fund, Ltd. c/o Cayman Corporate Center, Third Point Ultra Ltd. c/o Maples Corporate Services (BVI) Ltd., Third Point Partners Qualified L.P. Corporation Trust Center, and Third Point LLC, Defendants.
On August 28, 2019, the United States filed a Complaint against Defendants Third Point Offshore Fund, Ltd. (“Third Point Offshore”), Third Point Ultra, Ltd. (“Third Point Ultra”), Third Point Partners Qualified L.P. (“Third Point Partners”) (collectively, “Defendant Funds”) and Third Point LLC (collectively with Defendant Funds, “Defendants”), related to Defendant Funds' acquisitions of voting securities of DowDuPont Inc. (“DowDuPont”) on August 31, 2017. The Complaint alleges that Defendants violated Section 7A of the Clayton Act, 15 U.S.C. § 18a, commonly known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The HSR Act provides that “no person shall acquire, directly or indirectly, any voting securities or assets of any person” exceeding certain thresholds until that person has filed pre-acquisition notification and report forms with the Department of Justice and the Federal Trade Commission (collectively, the “federal antitrust agencies” or “agencies”) and the post-filing waiting period has expired. 15 U.S.C. § 18a(a). A key purpose of the notification and waiting period requirements is to protect consumers and competition from potentially anticompetitive transactions by providing the agencies an opportunity to conduct an antitrust review of proposed transactions before they are consummated.
The Complaint alleges that each Defendant Fund acquired voting securities of DowDuPont in excess of the then-applicable statutory threshold ($80.8 million at the time of acquisition) without making the required pre-acquisition HSR Act filings with the agencies and without observing the waiting period, and that each Defendant Fund and DowDuPont met the applicable statutory size of person thresholds.
At the same time the Complaint was filed in the present action, the United States also filed a Stipulation and proposed Final Judgment that eliminates the need for a trial in this case. The proposed Final Judgment is designed to address the violation alleged in the Complaint and deter Defendants' HSR Act violations and deter violations by similarly situated entities in the future. Under the proposed Final Judgment, Defendants must pay a civil penalty to the United States in the amount of $609,810 and are subject to an injunction against future violations.
Third Point LLC is a New York-based financial investment firm managed by Daniel S. Loeb.[1] Started in 1995 with approximately $3.3 million, Third Point LLC has grown quickly over the years and, in 2014, managed approximately $16 billion through a variety of funds, including Third Point Offshore, Third Point Ultra, and Third Point Partners, all of which are managed centrally by Mr. Loeb. At all times relevant to the Complaint, each Defendant Fund had assets in excess of $16.2 million. At all times relevant to the Complaint, DowDuPont had sales in excess of $161.5 million.
On December 11, 2015, the Dow Chemical Company (“Dow”) and E.I. du Pont de Nemours and Company (“DuPont”) entered into a Merger Agreement pursuant to which Dow and DuPont would consolidate into a single company, to be called DowDuPont Inc. On June 10, 2106, Dow and DuPont issued their Final Proxy Statement/Prospectus for the consolidation. That document disclosed that, upon completion of the transaction, Dow and DuPont would cease to have their common stock publicly traded and that shareholders would own shares in DowDuPont and would not directly own any shares of Dow and/or DuPont. On June 15, 2017, Dow and DuPont issued a joint press release stating that they had received antitrust clearance from the U.S. Department of Justice and that the transaction was on track to close in August 2017. On August 4, 2017, Dow and DuPont issued a joint press release setting the closing date of August 31, 2017 for the transaction. The press release also stated that shares of Dow and DuPont would cease trading at the close of the New York Stock Exchange on August 31, and shares of DowDuPont will begin trading on September 1, 2017.
As of August 31, 2017, Defendant Third Point Offshore held 6,446,300 voting securities of Dow; Defendant Third Point Ultra held 4,376,813 voting securities of Dow; and Defendant Third Point Partners held 2,540,700 voting securities of Dow. On August 31, 2017, Dow and DuPont completed the consolidation pursuant to a Merger Agreement dated December 11, 2015, as amended on March 31, 2017. As a result of the consolidation, all holders of Dow and DuPont voting securities received voting securities of DowDuPont.
On August 31, 2017, each Defendant Fund received voting securities of DowDuPont valued in excess of $80.8 million. Defendant Third Point Offshore acquired 6,446,300 voting securities of DowDuPont valued at approximately $429.6 million. Defendant Third Point Ultra acquired 4,376,813 voting securities of DowDuPont valued at approximately $291.7 million. Defendant Third Point Partners acquired 2,540,700 voting securities of DowDuPont valued at approximately $169.3 million. Each Defendant Fund is its own UPE within the meaning of the HSR Rules and had its own obligation to comply with the notification and waiting period requirements of the HSR Act and the HSR Rules.
The transactions described above were subject to the notification and waiting periods of the HSR Act. The Start Printed Page 48645HSR Act and the thresholds in effect during the time period relevant to this proceeding required that each Defendant Fund file a notification and report form with the Department of Justice and the Federal Trade Commission and observe a waiting period before acquiring and holding an aggregate total amount of voting securities of DowDuPont in excess of $80.8 million.
Previously, on April 7, 2014, each Defendant Fund had filed under the HSR Act to acquire voting securities of Dow and had observed the waiting period. Under Section 802.21 of the HSR Rules, Defendants were permitted for the subsequent five years to acquire additional voting securities of Dow without making another HSR Act filing so long as they did not exceed the next-higher threshold. However, Section 802.21 does not exempt Defendant Funds' acquisitions of DowDuPont voting securities because DowDuPont is not the same issuer as Dow within the meaning of the HSR Rules. Among other things, DowDuPont competes in additional lines of business from those in which Dow competed.
Although required to do so, each Defendant Fund failed to file and observe the waiting period prior to acquiring DowDuPont voting securities. Defendant Third Point LLC had the power and authority to file a notification under the HSR Act on behalf of each of Defendant Funds.
On November 8, 2017, each Defendant Fund filed a notification and report form under the HSR Act with the Department of Justice and the Federal Trade Commission to cover their acquisitions of DowDuPont voting securities. The waiting period relating to these filings expired on December 8, 2017. Each Defendant Fund was in violation of the HSR Act each day during the period beginning on August 31, 2017, and ending on December 8, 2017.
The Complaint further alleges that Defendants' August 31, 2017, HSR Act violation was not the first time Defendants had failed to observe the HSR Act's notification and waiting period requirements. Defendants are currently under a court decree resulting from allegations that they previously violated the HSR Act in connection with acquisitions of voting securities of Yahoo! Inc. (“Yahoo”). Specifically, on August 24, 2015, the United States filed a complaint for equitable relief alleging that Defendants' acquisitions of Yahoo voting securities in August and September 2011 violated the HSR Act. At the same time, the United States filed a Stipulation signed by Defendants and a proposed Final Judgment that would impose certain injunctive relief against Defendants, including the requirement that Defendants maintain a compliance program. The Final Judgment was entered by the court on December 18, 2015.
The proposed Final Judgment imposes a $609,810 civil penalty and an injunction against future violations designed to address the violation alleged in the Complaint and deter Defendants and others from violating the HSR Act. The United States adjusted the penalty downward from the maximum permitted under the HSR Act because the violation was inadvertent, Defendants promptly self-reported the violation after discovery, and Defendants are willing to resolve the matter by consent decree and avoid prolonged investigation and litigation. The relief will have a beneficial effect on competition because the agencies will be properly notified of future acquisitions, in accordance with the law. At the same time, neither the penalty nor the injunctive relief will have any adverse effect on competition.
The United States considered, as an alternative to the proposed Final Judgment, a full trial on the merits against Defendants. The United States is satisfied, however, that the proposed relief is an appropriate remedy in this matter. Given the facts of this case, including Defendants' self-reporting of the violation and willingness to settle this matter, the United States is satisfied that the proposed civil penalty and injunction are sufficient to address the violation alleged in the Complaint and to deter violations by similarly situated entities in the future, without the time, expense, and uncertainty of a full trial on the merits.
(A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing Start Printed Page 48646upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and
Special Attorney,
c/o Federal Trade CommissionStart Printed Page 48647
Phone: (202) 326-2694,
Email: klibby@ftc.gov.
1. Mr. Loeb closely controls Third Point LLC and its funds. He is not, however, the ultimate parent entity (“UPE”) within the meaning of the HSR Rules of any of the Third Point funds that made the relevant acquisitions of DowDuPont.
[FR Doc. 2019-19919 Filed 9-13-19; 8:45 am]
BILLING CODE 67500-01-P