MIDDLEBURY, Conn. (Jan. 12)—Crompton Corp. has decided to settle direct-purchaser class action lawsuits related to price-fixing of rubber chemicals, EPDM and nitrile rubber and is budgeting $97 million to do so.
Crompton, whose Uniroyal Chemical unit has admitted wrongdoing in U.S. and Canadian price-fixing investigations in rubber chemicals and agreed to pay $57 million in fines, will use a mediator to help settle the various lawsuits pending.
"We believe this settlement allows us to reduce risks associated with prolonged litigation and potential treble damages," said Robert L. Wood, chairman, president and CEO, who called the proposed settlement "costly (but) manageable."
"We believe that it's in Crompton's best interest to resolve these issues so that management can turn its full attention to creating value for our shareholders," Wood said.
Kenneth Feinberg, former special master of the September 11 Victim Compensation Fund, has agreed to act as mediator and to help the representatives of the three classes determine how the settlement funds should be allocated among the classes. In the event of a disagreement, Crompton said, Feinberg's decision will be binding on all parties.
Payment of the settlement funds will be made in three installments to each class, without interest, beginning at preliminary approval and continuing through the final approval or 18 months after preliminary approval by each court.
This action does not include lawsuits related to polyurethane raw materials, but the firm said it feels these can be settled on a level similar to recent plastics additives settlements in the $5 million range.