Bankruptcy not protecting Lear from price-fixing lawsuits
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DETROIT (Bloomberg) -- Electronics and seating supplier Lear Corp. largely failed in its effort to use the company’s 2009 bankruptcy to stop antitrust lawsuits alleging a price-fixing conspiracy among manufacturers of wire harnesses.
On Friday, Judge Allan Gropper of U.S. Bankruptcy Court ruled that Lear can be sued for actions taken after emerging from Chapter 11 on Nov. 9, 2009, and might be liable for conduct before its emergence from bankruptcy.
The first antitrust suit was filed against Lear in October alleging an antitrust conspiracy going back to 2000. Lear filed papers in Gropper’s court in November contending that the alleged actions occurred before the exit from bankruptcy, meaning the suit was barred by the discharge afforded by the Chapter 11 plan.
Since then, 44 suits were filed and have been consolidated into U.S. District Court in Detroit. The plaintiffs argue that their suits weren’t barred because Lear’s violation of antitrust laws continued after it emerged from bankruptcy.
Gropper ruled in his Friday opinion that the plaintiffs may continue suing Lear based on allegations of misconduct after leaving Chapter 11. He told the plaintiffs they can file papers in his court for permission to file a late class proof of claim based on actions before or during bankruptcy.
To survive, Gropper said, the late claims must be based on constitutionally inadequate notice of the bankruptcy or contentions that the antitrust misconduct was incapable of discovery until after bankruptcy.
Gropper said he was expressing no opinion on whether he would allow late claims on behalf of a class of plaintiffs.
Gropper’s ruling barred the plaintiffs from suing Lear in District Court based on actions before emergence from bankruptcy.
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