Lear agrees to $8.75 million price-fixing settlement
DETROIT -- Seating and electronics supplier Lear Corp. will ask a bankruptcy court judge in New York later this month to sign off on an $8.75 million settlement to a Detroit lawsuit involving automotive supplier price-fixing over the previous decade.
The company, with $16.2 billion 2013 revenue and 122,000 employees, will pay the settlement to resolve accusations it was a part of a conspiracy to bolster the prices of wire harness components between 2000 and 2010 in a multi-district litigation lawsuit before U.S. District Judge Marianne Battani in Detroit.
The civil cases are separate from the massive global criminal investigation into price fixing in the automotive supply chain. Several ongoing investigations are taking place in North America, Europe and Asia. In the United States, federal anti-trust authorities so far have levied some $2.29 billion in fines on auto suppliers, most of them Japanese. The U.S. Justice Department last month said 33 people have been charged, and 26 companies have either pleaded guilty or agreed to plead guilty.
Lear's civil court agreements call for a $4.75 million payout to the lawsuit’s “direct purchasers,” or other auto companies that bought the parts at colluded prices, another $3 million to car buyer plaintiffs and about $1 million to auto dealerships that are also part of the court case.
The agreement also calls for Lear to put up $370,263 of its own cash and obtain the rest out of assets held in reserve from the company’s previous Chapter 11 bankruptcy reorganization from 2009 for “disputed claims.”
The company has yet to ask Battani to approve the settlement, but it awaits a hearing May 27 before U.S. Bankruptcy Judge Allan Gropper in New York to approve the use of those assets for it.
“The company maintains that it violated no laws in connection with this matter … (and) the conduct alleged by the class plaintiffs overwhelmingly relates to periods prior to (our) emergence from bankruptcy,” Lear said in a disclosure to the U.S. Securities and Exchange Commission.
Philip Nussel contributed to this report.
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