MEMPHIS, Tenn. (From news reports) -- International Paper Co. has agreed to pay $354 million as part of a settlement fund for a class action lawsuit.
IP announced June 27 that it entered into an agreement to settle the antitrust class action lawsuit with Kleen Products. The lawsuit was filed in 2010 against IP and seven other containerboard producers regarding the price of containerboard products.
According to the release, the agreement by IP -- which still needs to be approved by the U.S. District Court for the Northern District of Illinois -- would resolve the "disputed claims" surrounding the price of containerboard products purchased directly from IP, Temple-Inland Inc. and Weyerhaeuser Co. The $354 million would be paid into a settlement fund "in return for dismissal and release of all claims."
"We continue to maintain that the allegations are baseless and without merit," said Mark Sutton, chairman and CEO of IP. "However, we have agreed to settle this lawsuit in order to avoid substantial on-going legal expenses and the inherent risks of a multibillion-dollar class-action lawsuit."
IP will "record a reserve" for the settlement amount, which will result in a pre-tax charge of $354 million -- $219 million, net of tax -- in the second quarter of 2017.
Two of the other defendants -- PCA and Norampac -- previously settled. The remaining defendants are Smurfit Stone -- now known as WestRock -- and Georgia Pacific.
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