DuPont 2005 Annual Report Download - page 93

E. I. du Pont de Nemours and Company
Notes to Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
The company believes that the 15 class actions and the motion filed in Quebec are without merit and, therefore, believes it is
not probable that it will incur material losses related to these actions. Therefore, at December 31, 2005, the company had not
established any reserves related to these matters.
Elastomers Antitrust Matters
Investigations of the U.S., European Union and Canadian synthetic rubber markets for possible antitrust violations are ongoing.
These investigations included DuPont Dow Elastomers, LLC (DDE), as a result of its participation in the polychloroprene (PCP)
and ethylene propylene diene monomer (EPDM) markets. DDE was a joint venture between The Dow Chemical Company and
DuPont. DDE and DuPont were named in related civil litigation.
In April 2004, DuPont and Dow entered into a series of agreements under which DuPont obtained complete control over
directing DDE’s response to these investigations and the related litigation, and DuPont agreed to a disproportionate share of
the venture’s liabilities and costs related to these matters. Consequently, DuPont bears any potential liabilities and costs up to
the initial $150. Dow is obligated to indemnify DuPont for up to $72.5 by paying 15 to 30 percent toward liabilities and costs in
excess of $150. On June 30, 2005, DDE became a wholly owned subsidiary of DuPont and was renamed DuPont Performance
Elastomers LLC (DPE). See Note 13.
DDE resolved all criminal antitrust allegations against it related to PCP in the United States through a plea agreement with the
Department of Justice (DOJ) in January 2005 which was approved by the court on March 29, 2005. The agreement requires the
subsidiary to pay a fine of $84 which, at its election, may be paid in six equal, annual installments. The first installment was
paid in 2005. The agreement also requires the subsidiary to provide ongoing cooperation with the DOJ’s investigation. DDE
responded to investigations from European Union and Canadian antitrust authorities and DPE continues to cooperate with the
authorities.
In November 2004, the court approved the settlement reached by DDE and attorneys for the class of federal antitrust litigation
related to PCP for $42, including attorneys’ fees and costs. DDE also reached a settlement with attorneys for the class of
federal antitrust litigation related to EPDM for $24.6, including attorneys’ fees and costs. The court approved the EPDM
settlement in May 2005. Including these settlements, the company has paid $93 related to civil lawsuits and claims through
December 31, 2005. Certain claims are still pending.
As a result of its April 2004 agreements with Dow, DuPont established reserves in 2004 of $268, of which $18 will be
reimbursed by Dow to reflect its share of anticipated losses. At December 31, 2005, the balance of the reserves was $153
which includes $70 for the remaining 5 installment payments yet to be made under the plea agreement with the DOJ. Given the
uncertainties inherent in predicting the outcome of these matters and the likelihood of additional future claims, if any, it is
reasonably possible that actual losses may exceed the amount accrued. However, a range of such losses cannot be reasona-
bly estimated at this time.
Automotive Refinishes
Class actions were filed against DuPont and four other manufacturers of automotive refinishes in 2001 for civil damages arising
out of an alleged conspiracy to fix prices. The majority of these lawsuits were consolidated in the federal district court of
Philadelphia, Pennsylvania. In 2004, DuPont settled these lawsuits for $36.
General
The company is subject to various lawsuits and claims arising out of the normal course of business. These lawsuits and claims
include actions based on alleged exposures to products, intellectual property and environmental matters, and contract and
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