Quanta Gets Temporary Delay for Handing Over All Assets to HP
(Bloomberg) -- Quanta Storage Inc. was granted more time by a U.S. appeals court to turn over essentially all its assets to HP Inc. to satisfy a $439 million antitrust judgment related to price fixing in optical-disk drives.
A three-judge federal panel in New Orleans on Thursday temporarily halted enforcement proceedings against Taiwan-based Quanta a day after a trial judge in Houston refused to alter his Friday deadline for the handover. The company faced a fine of $50,000 for each day it was late in complying.
Quanta says it’s caught in a coronavirus Catch-22 because the Taiwanese government commandeered the company’s factories to make face masks to fight the pandemic. Travel restrictions also prevent executives from raising bond money or getting regulatory appraisals needed for the transfer, the company’s lawyers said.
A Houston jury awarded HP $176 million in damages after a price-fixing trial last year, and U.S. District Judge David Hittner tripled the total as permitted under U.S. antitrust law. Hittner has rejected Quanta’s request to delay the asset turnover three times, including on Wednesday.
Quanta told the appeals court it’s turning over its U.S. patents and trademarks -- “the only assets of Quanta’s that are located in the United States, as opposed to Taiwan and China” -- to the Houston court Thursday. The company won’t dispose of any assets greater than $100,000 without the Houston judge’s approval, it said in the filing.
Quanta said the remaining transfers require a vote by its board of directors, who are unlikely to act until a Taiwanese court confirms the Texas judgment is valid and enforceable.
The three New Orleans judges signaled they’re willing to move quickly to resolve Quanta’s emergency plea, ordering HP to respond to the complaint by noon Friday.
HP insists Quanta is using the coronavirus as a ploy to dissipate assets that could be used to satisfy the judgment. In court documents filed Wednesday and Thursday, HP said Quanta is only making face masks for its employees and that there are no legal roadblocks in Taiwan to prevent the company from handing over intellectual property, cash and factories.
HP sued several makers of optical-disk drives, claiming they conspired for years to inflate prices HP paid for components used to store and read media and data on DVDs, CDs and Blu-Ray discs. Industry giants, including Toshiba Corp., Samsung Electronics, Hitachi-LG, Sony Electronics, jointly controlled 90% of the market. All but Quanta settled out of court.
The case is Hewlett-Packard Co. v. Quanta Storage Inc., 19-20799, U.S. Court of Appeals for the Fifth Circuit (New Orleans).
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