By Darren Fishell, Bangor Daily News
PORTLAND, Maine — A federal judge has ruled Verso Paper’s agreement to sell mills in Rumford and Biron, Wisconsin, was sufficient to settle antitrust complaints stemming from its $1.4 billion purchase of larger competitor NewPage.
The approval late Friday came nearly a year after the companies completed the sale and means struggling Verso, which owns a mill in Jay, won’t need to meet other conditions to resolve the antitrust complaint from the U.S. Department of Justice.
The 58-member union representing former Verso employees at the shuttered Bucksport mill objected to the settlement.
The union argued the settlement should have included the Bucksport mill and gone further to remedy concerns about Verso’s influence in the coated paper market.
In a separate memo about the decision, U.S. District Judge Tanya Chutkan wrote that the court has limited authority to overrule the Department of Justice’s assessment of what would remedy the alleged antitrust harms under the federal Tunney Act.
“When plants such as the one in Bucksport close, entire communities, where families may have been employed for generations, are often devastated, and the court is aware of the objectors’ frustrations with a remedy they deem insufficient,” Chutkan wrote, citing another paper industry antitrust settlement case. “However, the court’s role here is a limited one, and ‘the relevant inquiry is whether the United States’ conclusion about the adequacy of the … divestiture was reasonable, not whether it was correct.'”
Chutkan referred to the antitrust settlement between the federal government and pulp and paper producer Abitibi-Consolidated, which merged in 2007 with Bowater to form AbitibiBowater and reorganized as Resolute Forest Products through a bankruptcy in 2010.
The unions argued the U.S. Department of Justice should have involved Bucksport in the settlement, requiring Verso either to sell the mill to a competing paper maker or prevent the sale to entities seeking to scrap the mill. The town of Bucksport in November approved a permit for AIM Development to demolish the mill.
Chutkan wrote the government laid out a factual basis for not including the Bucksport mill in the settlement, finding it was not closed because of the merger but because of declining demand for the coated groundwood paper it produced, used in commercial printing for applications such as magazines and catalogs.
Chutkan also cleared objections to the Department of Justice’s judgment that the sale of Verso’s Rumford and Biron, Wisconsin, mills to Catalyst Paper would create a sufficiently strong competitor.
The court also held that price increases after the merger were not a result of the merger and that a broader investigation of anticompetitive conduct by Verso’s parent corporation, Apollo Global Management, was beyond its review under the Tunney Act.
The company has struggled since completing the merger as well.
It plans to lay off 310 workers at a mill in Kentucky and 300 at its Jay mill, mostly in December. In September, the company’s stock was pulled from the New York Stock Exchange after prices fell to 15 cents per share.
The settlement agreement approved Friday expires in 10 years, meaning Verso could face antitrust complaints if it were to reacquire either of the mills it sold as part of the settlement.
This story appears through a media partnership with the Bangor Daily News.