Crompton Corp. announced last week that it expects to enter a $97.1 million agreement to settle class action lawsuits filed by three groups of customers seeking redress for Cromptons participation in a conspiracy to fix prices for rubber chemicals.
The company previously agreed to pay fines totaling $57.4 millionas part of a guilty pleas with United States and Canadian prosecutors. The case apparently does not involve rubber process oils or products used in the lubricants industry.
Crompton officials said they agreed to the settlement in order to put the matter behind it and to avoid the possibility of having to pay more money.
We believe this settlement represents a good resolution of a very difficult issue, Chairman, President and Chief Executive Officer Robert L. Wood said. It allows us to reduce risks associated with prolonged litigation and potential treble damages. We also believe it is a fair resolution with respect to the company and our customers. This settlement, while costly, is manageable.
Several things still must happen before the settlement becomes final. First a mediator will work with the three groups of customers – one each for rubber chemicals, EPDM (ethylene propylene diene monomer) and nitrile rubber – to seek an agreement of how to divide the damages. Should they fail to reach an agreement, the mediator will make a binding decision. The settlement then goes to the courts hearing each of the three cases for preliminary approval. If granted, individual class plaintiffs will be given a choice of participating or opting out. If too many members opt out, Crompton may decline to settle with certain groups or rescind the settlement altogether.
Crompton, which is based in Middlebury, Conn., is a producer and marketer of specialty chemicals and polymer products with annual revenues of $2.2 billion. Rubber chemicals are part of Cromptons Uniroyal Chemical business.