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StarKist to Court: Fine Will Break Us

Aug. 9, 2019
StarKist’s lawyer says it can’t afford the criminal fine and other financial consequences of its price-fixing.

StarKist’s lawyer says it can’t afford the criminal fine and other financial consequences of its price-fixing, and may go bankrupt if it tries to pay.

The Wall Street Journal reports that Niall Lynch, a lawyer for StarKist Co., told a federal judge that a potential $100 million fine in the price-fixing case, on top of civil liabilities in lawsuits brought by customers, would put severe stress on the company’s finances.

StarKist agreed last fall to plead guilty to price-fixing charges brought by the U.S Justice Department against it and competitors. The suit charged that the companies planned “to fix, raise and maintain” the cost of canned tuna and other seafood, but the charging papers did not give details.

Lynch complained to the federal judge overseeing the case that the government was inflexible in its demand for the $100 million maximum fine. He asked that the fine be reduced to $50 million to help StarKist avoid bankruptcy and pay potential creditors in the civil cases.

A Justice Department lawyer suggested that StarKist could sell or borrow against a packaging subsidiary owned by its parent company, but StarKist maintains it is unable to do so.

U.S. District Judge Edward Chen told the parties to try to reach some accommodation that would preserve StarKist’s ability to pay civil litigants.

Bumble Bee Foods, a StarKist competitor caught in the price-fixing case, is having trouble paying its fine of $25 million. The company has hired a turnaround firm to help it restructure its debts.

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