Tecumseh Products 2014 Annual Report Download - page 67

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Company and its subsidiaries and Motoco a.s. in November 2007, have notified us that they claim indemnification with respect
to this lawsuit under our Stock Purchase Agreement with them.
A settlement involving all but three of the defendants (Kawasaki, American Honda and Tecumseh) has been negotiated and
approved by the court. It is not binding on the non-settling defendants, nor is it determinative of their liability, if any.
At this time, we do not have a reasonable estimate of the amount of our ultimate liability, if any, or the amount of any potential
future settlement, but the amount could be material to our financial position, consolidated results of operations and cash flows.
On May 3, 2010, a class action was commenced in the Superior Court of the Province of Quebec by Eric Liverman and Sidney
Vadish against us and several other defendants (including those listed above) advancing allegations similar to those outlined
immediately above. Plaintiffs seek undetermined monetary damages, punitive damages, interest, costs, and equitable relief. As
stated above, Snowstorm Acquisition Corporation and Platinum Equity, LLC, the purchasers of Tecumseh Power Company and
its subsidiaries and Motoco a.s. in November 2007, have notified us that they claim indemnification with respect to this lawsuit
under our Stock Purchase Agreement with them.
As was the case with the Ontario litigation described above, a settlement involving all but three of the defendants (Kawasaki,
American Honda and Tecumseh) has been negotiated and approved by the court. It is not binding on the non-settling
defendants, nor is it determinative of their liability, if any.
At this time, we do not have a reasonable estimate of the amount of our ultimate liability, if any, or the amount of any potential
future settlement, but the amount could be material to our financial position, consolidated results of operations and cash flows.
Compressor industry antitrust investigation
On February 17, 2009, we received a subpoena from the United States Department of Justice Antitrust Division (“DOJ”) and a
formal request for information from the Secretariat of Economic Law of the Ministry of Justice of Brazil (“SDE”) related to
investigations by these authorities into possible anti-competitive pricing arrangements among certain manufacturers in the
compressor industry. The European Commission began an investigation of the industry on the same day.
We have entered into a conditional amnesty agreement with the DOJ under the Antitrust Division's Corporate Leniency
Policy. Pursuant to the agreement, the DOJ has agreed to not bring any criminal prosecution or impose any monetary fines with
respect to the investigation against us as long as we, among other things, continue our full cooperation in the investigation. We
have received similar conditional immunity from the European Commission and the SDE, and have received or requested
immunity or leniency from competition authorities in other jurisdictions. On December 7, 2011, the European Commission
announced it had reached a cartel settlement under which certain of our competitors received fines for the conduct investigated.
As a result of our conditional immunity, we were not assessed any fine.
While we have taken steps to avoid fines, penalties and other sanctions as the result of proceedings brought by regulatory
authorities, the amnesty grants do not extend to civil actions brought by private plaintiffs. The public disclosure of these
investigations has resulted in class action lawsuits filed in Canada and numerous class action lawsuits filed in the United States,
including by both direct and indirect purchaser groups. In Canada, the class actions are still in a preliminary stage. All of the
U.S. actions have been transferred to the U.S. District Court for the Eastern District of Michigan for coordinated or
consolidated pretrial proceedings under Multidistrict Litigation (“MDL”) procedures.
Persons who engage in price-fixing in violation of U.S. antitrust law generally are jointly and severally liable to private
claimants for three times the actual damages caused by the joint conduct. As a conditional amnesty recipient, however, our civil
liability will be limited pursuant to the Antitrust Criminal Penalty Enhancement and Reform Act of 2004, as amended
(“ACPERA”). As long as we continue to cooperate with the civil claimants and comply with the requirements of ACPERA, we
will be liable only for actual, as opposed to treble, damages and will not be jointly and severally liable for claims against other
participants in the alleged anticompetitive conduct being investigated.
As previously reported, Tecumseh Products Company, Tecumseh Compressor Company, Tecumseh do Brasil, Ltda, and
Tecumseh do Brasil U.S.A. LLC entered into a settlement agreement with the direct purchaser plaintiffs in the U.S. actions on
June 24, 2010 to resolve claims in the action in order to avoid the costs and distraction of this ongoing class action litigation.
On June 13, 2011, the Court issued an order denying without prejudice a motion for preliminary approval of our proposed
settlement with the direct purchaser plaintiffs because the time frame and products covered by the proposed settlement class
were inconsistent with the Court's rulings of the same date granting, in part, a motion by the other defendants to dismiss claims
by the direct purchaser plaintiffs.
The direct purchaser plaintiffs subsequently filed a Second Amended Master Complaint to reflect the court's rulings on the
motion to dismiss which allowed them to cover fractional compressors, or compressors of less than one horsepower, used for