Carpenter Co. to pay $63.5 million to settle price-fixing suit
Posted: Thursday, June 25, 2015 10:30 pm
By JOHN REID BLACKWELL Richmond Times-Dispatch
Henrico County-based Carpenter Co. has agreed to pay $63.5 million as its part of a deal to settle a class-action lawsuit that accused the company and eight others of conspiring to fix prices.
Carpenter, one of the world’s largest suppliers of foams and polyester fibers used in mattresses, pillows, sofas, car seats and other durable goods, did not admit any wrongdoing, according to documents filed in U.S. District Court in Toledo, Ohio.
Carpenter and eight other makers of foam mattress and furniture materials have agreed to pay nearly $400 million to settle the lawsuits that accused the companies of conspiring to fix prices.
The privately held company’s settlement is for cases related to indirect purchasers of its foam products, industry publication Furniture Today reported.
The company declined to comment, according to a spokesman for Richmond-based McGuireWoods LLP, which is representing Carpenter. The Chicago lawyer representing the buyers of the foam products did not return phone calls.
Several lawsuits were filed in 2010 seeking class action status and alleging price-fixing in the foam industry. In July 2010, the FBI raided offices of Carpenter and other manufacturers to obtain documents.
It is the second time that Carpenter has agreed to a settlement as a result of price-fixing allegations. In November, the company agreed to pay $108 million to settle a lawsuit brought by various direct buyers who make products containing foam, federal court documents show.
The new settlement with indirect buyers calls for each manufacturer of foam to place millions of dollars in various escrow funds that can be accessed by companies that purchased the foam between Jan. 1, 1999, and July 30, 2010.
Carpenter agreed to deposit $20 million of its settlement amount into an escrow account in May, court records show. The company also agreed to deposit the balance, $43.5 million, to an escrow account within 10 days of the final approval of the settlement.
A final hearing is set for Oct. 9.
The settlement puts to rest claims brought by hotel chains and other indirect buyers of polyurethane foam products such as carpet, bedding and upholstered furniture, Furniture Today reported. That group will receive $128.5 million from six polyurethane foam producers including Carpenter.
The other group, primarily foam fabricators and packaging companies, will receive $266.5 million from six foam producers, including three who also settled with the first group.
The plaintiffs accused Carpenter and other manufacturers of a “conspiracy” to “raise, fix, maintain, or stabilize prices and allocate territories or customers for flexible polyurethane foam and flexible polyurethane foam products,” court records show.
Carpenter agreed to the settlement “in order to avoid the costs, expenses, risk, and burden of further litigation,” according to court documents.
The other manufacturers that agreed to settle are Hickory Springs Manufacturing Co., Leggett & Platt Inc., Mohawk Inc., Vitafoam Products Canada Ltd., Vitafoam Inc., Woodbridge Foam Corp., Woodbridge Sales & Engineering Inc. and Woodbridge Foam Fabricating Inc.
Carpenter, founded in 1948, designs most of its sleep products at a center off Jefferson Davis Highway in South Richmond.