96-12818. The Loewen Group, Inc; Loewen Group International, Inc.; Propose Consent Agreement With Analysis To Aid Public Comment  

  • [Federal Register Volume 61, Number 100 (Wednesday, May 22, 1996)]
    [Notices]
    [Pages 25672-25677]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 96-12818]
    
    
    
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    FEDERAL TRADE COMMISSION
    
    [File No. 931-0084]
    
    
    The Loewen Group, Inc; Loewen Group International, Inc.; Propose 
    Consent Agreement With Analysis To Aid Public Comment
    
    AGENCY: Federal Trade Commission.
    
    ACTION: Proposed consent agreement.
    
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    SUMMARY: In settlement of alleged violations of federal law prohibiting 
    unfair or deceptive acts or practices and unfair methods of 
    competition, this consent agreement, accepted subjected to final 
    Commission approval, would require, among other things, the Covington, 
    Kentucky-based company to divest the Castelwood Funeral Home in 
    Castelwood, Virginia within nine months of acquiring it. The Consent 
    Agreement settles allegations that Lowen's proposed acquisition of 
    Heritage Family Funeral Services, Inc., would substantially reduce 
    competition in Castlewood, because Loewen and heritage are the only 
    firms providing funeral services in the Castlewood area.
    
    DATES: Comments must be received on or before July 22, 1996.
    
    ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
    Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
    
    FOR FURTHER INFORMATION CONTACT:
    Thomas B. Carter, Dallas Regional Office, Federal Trade Commission, 100 
    N. Central Expressway, Suite 500, Dallas, TX 75201. (214) 767-5518.
    Gary D. Kennedy, Dallas Regional Office, Federal Trade Commission, 100 
    N. Central Expressway, Suite 500, Dallas, TX 75201. (214) 767-5512.
    James R. Golder, Dallas Regional Office, Federal Trade Commission, 100 
    N. Central Expressway, Suite 500, Dallas, TX 75201. (214) 767-5508.
    
    SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
    Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
    the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
    given that the following consent agreement containing a consent order 
    to cease and desist, having been filed with and accepted, subject to 
    final approval, by the Commission, has been placed on the public record 
    for a period of sixty (60) days. Public comment is invited. Such 
    comments or views will be considered by the Commission and will be 
    available for inspection and copying at its principal office in 
    accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of 
    Practice (16 CFR 4.9(b)(6)(ii)).
        The Federal Trade Commission (``Commission'') having initiated an 
    investigation of the proposed acquisition of the voting securities of 
    Heritage Family Funeral Services, Inc. by The Loewen Group Inc., a 
    corporation, and Loewen Group International, Inc., a corporation 
    (hereinafter collectively referred to as ``Loewen''), and it now 
    appearing that Loewen is willing to enter into an agreement containing 
    an order to divest certain assets, and to cease and desist from certain 
    acts.
        It is hereby agreed by and between Loewen, its duly authorized 
    officers and attorneys, and counsel for the Commission that:
        1. Proposed respondent The Loewen Group Inc. is a corporation 
    organized, existing and doing business under and by virtue of the laws 
    of the province of British Columbia, Canada, with its office and 
    principal place of business located at 4126 Norland Avenue, Burnaby, 
    British Columbia, Canada V5G 3S8.
        2. Proposed respondent Loewen Group International, Inc. is a 
    corporation organized, existing and doing business under and by virtue 
    of the laws of the State of Delaware, with its office and principal 
    place of business located at 50 East River Center Boulevard, Covington, 
    Kentucky 41011. Proposed respondent Loewen Group International, Inc. is 
    a wholly-owned subsidiary of The Loewen Group Inc.
        3. Loewen admits all the jurisdictional facts set forth in the 
    draft of complaint.
        4. Loewen waives:
        a. Any further procedural steps;
        b. The requirement that the Commission's decision contain a 
    statement of findings of fact and conclusions of law;
        c. All rights to seek judicial review or otherwise to challenge or 
    contest the validity of the order entered pursuant to this agreement; 
    and
        d. Any claim under the Equal Access to Justice Act.
        5. This agreement shall not become part of the public record of the 
    proceeding unless and until it is accepted by the Commission. If this 
    agreement is accepted by the Commission, it, together with the draft of 
    complaint contemplated thereby, will be placed on the public record for 
    a period of sixty (60) days and information in respect thereto publicly 
    released. The Commission thereafter may either withdraw its acceptance 
    of this agreement and so notify Loewen, in which even it will take such 
    action as it may consider appropriate, or issue and serve its complaint 
    (in such form as
    
    [[Page 25673]]
    
    the circumstances require) and decision, in disposition of the 
    proceeding.
        6. This agreement is for settlement purposes only and does not 
    constitute an admission by Loewen that the law has been violated as 
    alleged in the draft of complaint here C13, or that the facts as 
    alleged in the draft complaint, other than jurisdictional facts, are 
    true.
        7. This agreement contemplates that, if it is accepted by the 
    Commission, and if such acceptance is not subsequently withdrawn by the 
    Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
    Rules, the Commission may, without further notice to Loewen, (1) issue 
    its complaint corresponding in form and substance with the draft of 
    complaint E13 and its decision containing the following order to divest 
    and to cease and desist in disposition of the proceeding and (2) make 
    information public in respect thereto. When so entered, the order to 
    divest and to cease and desist shall have the same force and effect and 
    may be altered, modified, or set aside in the same manner and within 
    the same time provided by statute for other orders. The order shall 
    become final upon service. Delivery by the U.S. Postal Service of the 
    complaint and decision containing the agreed-to order to Loewen's 
    address as stated in this agreement shall constitute service. Loewen 
    waives any right it may have to any other manner of service. The 
    complaint may be used in construing the terms of the order, and no 
    agreement, understanding, representation, or interpretation not 
    contained in the order or the agreement may be used to vary or 
    contradict the terms of the order.
        8. Loewen has read the proposed complaint and order contemplated 
    hereby. It understands that, once the order has been issued, it will be 
    required to file one or more compliance reports showing that it has 
    fully complied with the order. Loewen further understands that it may 
    be liable for civil penalties in the amount provided by law for each 
    violation of the order after it becomes final.
    
    Order
    
    I.
    
        It is ordered that as used in this order, the following definitions 
    shall apply:
        A. ``Loewen'' means The Loewen Group Inc. and Loewen Group 
    International, Inc., their directors, officers, employees, agents and 
    representatives, predecessors, successors and assigns, their 
    subsidiaries, divisions, groups and affiliates controlled by Loewen, 
    and the respective directors, officers, employees, agents, 
    representatives, successors and assigns of each.
        B. ``Funeral'' means a group of services provided at the death of 
    an individual, the focus of which is some form of commemorative 
    ceremony of the life of the deceased at which ceremony the body is 
    present; this group of services ordinarily includes, but is not limited 
    to: the removal of the body from the place of death; its embalming or 
    other preparation; making available a place for visitation and viewing, 
    for the conduct of a funeral service, and for the display of caskets 
    and outside cases; and the arrangement for the conveyance of the body 
    to a cemetery or crematory for final disposition.
        C. ``Funeral establishment'' means any facility that provides 
    funerals.
        D. ``Property to be Divested'' means all of the assets, properties, 
    business and goodwill, tangible and intangible, utilized by the 
    Castlewood Funeral Home located on Highway 58 in Castlewood, Virginia, 
    including, but not limited to:
        1. All right, title and interest in and to owned or leased real 
    property, together with appurtenances, licenses and permits;
        2. All machinery, fixtures, equipment, furniture, tools and other 
    tangible personal property;
        3. All right, title and interest in the trade name of any funeral 
    establishment, provided that the trade name ``Heritage'' need not be 
    divested;
        4. All right, title and interest in the books, records and files 
    pertinent to the Property to be Divested;
        5. Vendor lists, management information systems, software, 
    catalogs, sales promotion literature, and advertising materials; and
        6. All right, title, and interest in and to the contracts entered 
    into in the ordinary course of business with customers (together with 
    associated bids and performance bonds), suppliers, sales 
    representatives, distributors, agents, personal property lessors, 
    personal property lessees, licensors, licensees, consignors, and 
    consignees.
    
    II.
    
        It is further ordered that:
        A. Within nine (9) months after Loewen acquires the Property to be 
    Divested, Loewen shall divest, absolutely and in good faith, the 
    Property to be Divested. The Property to be Divested is to be divested 
    only to an acquirer or acquirers that receive the prior approval of the 
    Commission, and only in a manner that receives the prior approval of 
    the Commission. The purpose of the divestiture required by this order 
    is to ensure the continued use of the Property to be Divested as an 
    ongoing viable enterprise providing funerals and to remedy the 
    lessening of competition alleged in the Commission's complaint.
        B. Pending divestiture of the Property to be Divested, Loewen shall 
    maintain the viability and marketability of the Property to be Divested 
    and shall not cause or permit the destruction, removal, or impairment 
    of any assets or business of the Property to be Divested, except in the 
    ordinary course of business and except for ordinary wear and tear.
        C. Loewen shall comply with the Agreement to Hold Separate, 
    attached hereto and made a part hereof as Appendix I. Said agreement 
    shall continue in effect until Loewen has divested the Property to be 
    divested or until such other time as the Agreement to Hold Separate 
    provides.
    
    III.
    
        It is further ordered that:
        A. If Loewen has not divested, absolutely and in good faith and 
    with the Commission's prior approval, the Property to be Divested as 
    required by paragraph II of this order within nine (9) months after 
    Loewen has acquired the Property to be Divested, the Commission may 
    appoint a trustee to divest the Property to be Divested. In the event 
    the Commission or the Attorney General brings an action pursuant to 
    Section 5 (1), or any other statute enforced by the Commission, Loewen 
    shall consent to the appointment of a trustee in such action. Neither 
    the appointment of a trustee nor a decision not to appoint a trustee 
    under this Paragraph shall preclude the Commission or the Attorney 
    General from seeking civil penalties or any other relief available to 
    it, including a court-appointed trustee, pursuant to Section 5(1) of 
    the Federal Trade Commission Act, or any other statute enforced by the 
    Commission, for any failure by Loewen to comply with this order.
        B. If a trustee is appointed by the Commission or a court pursuant 
    to Paragraph III.A. of this order, Loewen shall consent to the 
    following terms and conditions regarding the trustee's powers, 
    authorities, duties and responsibilities:
        1. The Commission shall select the trustee, subject to the consent 
    of Loewen, which consent shall not be unreasonably withheld. The 
    trustee shall be a person with experience and expertise in acquisitions 
    and divestitures. If Lowen has not opposed, in writing, the selection 
    of any proposed trustee within ten (10) days after notice by the staff 
    of the Commission to
    
    [[Page 25674]]
    
    Loewen of the identity of any proposed trustee, Loewen shall be deemed 
    to have consented to the selection of the proposed trustee.
        2. Subject to the prior approval of the Commission, the trustee 
    shall have the exclusive power and authority to divest the Property to 
    be Divested.
        3. The trustee shall have the power and authority to abrogate any 
    contract or agreement between Loewen and any individual which 
    restricts, limits or otherwise impairs the ability of such individual 
    to purchase the Property to be Divested or to become a director, 
    officer, employee, agent or representative of any acquirer of the 
    Property to be Divested.
        4. Within ten (10) days after appointment of the trustee, and 
    subject to the prior approval of the Commission and, in the case of a 
    court-appointed trustee, of the court, Loewen shall execute a trust 
    agreement that transfers to the trustees all rights and powers 
    necessary to permit the trustee to effect the divestiture required by 
    this order.
        5. The trustee shall have twelve (12) months from the date the 
    Commission approves the trust agreement described in Paragraph III.B.4 
    to accomplish the divestiture, which shall be subject to the prior 
    approval of the Commission. If, however, at the end of the twelve-month 
    period the trustee has submitted a plan of divestiture or believes that 
    divestiture can be accomplished within a reasonable time, the 
    divestiture period may be extended by the Commission, or in the case of 
    a court-appointed trustee, by the court; provided, however, that the 
    Commission may extend the divestiture period only two (2) times.
        6. The trustee shall have full and complete access to the 
    personnel, books, records and facilities relating to the Property to be 
    Divested, or any other relevant information, as the trustee may 
    request. Loewen shall develop such financial or other information as 
    such trustee may request and shall cooperate with the trustee. Loewen 
    shall take no action to interfere with or impede the trustee's 
    accomplishment of the divestiture. Any delays in divestiture caused by 
    Loewen shall extend the time for divestiture under this Paragraph in an 
    amount equal to the delay, as determined by the Commission or for a 
    court-appointed trustee, the court.
        7. The trustee shall use his or her best efforts to negotiate the 
    most favorable price and terms available in each contract that is 
    submitted to the Commission, subject to Loewen's absolute and 
    unconditional obligation to divest at no minimum price. The divestiture 
    shall be made in the manner and to the acquirer or acquirers as set out 
    in Paragraph II of this order; provided, however, if the trustee 
    receives bona fide offers from more than one acquiring entity, and if 
    the Commission determines to approve more than one such acquiring 
    entity, the trustee shall divest to the acquiring entity or entities 
    selected by Loewen from among those approved by the Commission.
        8. The trustee shall serve, without bond or other security, at the 
    cost and expense of Loewen, on such reasonable and customary terms and 
    conditions as the Commission or the court may set. The trustee shall 
    have authority to employ, at the cost and expense of Loewen, such 
    consultants, accountants, attorneys, investment bankers, business 
    brokers, appraisers, and other representatives and assistants as are 
    reasonably necessary to carry out the trustee's duties and 
    responsibilities. The trustee shall account for all monies derived from 
    the divestiture and all expenses incurred. After approval by the 
    Commission and, in the case of a court-appointed trustee, by the court, 
    of the account of the trustee, including fees for his or her services, 
    all remaining monies shall be paid at the direction of Loewen and the 
    trustee's power shall be terminated. The trustee's compensation shall 
    be based at least in a significant part on a commission arrangement 
    contingent on the trustee's divesting the Property to be Divested.
        9. Loewen shall indemnify the trustee and hold the trustee harmless 
    against any losses, claims, damages, liabilities, or expenses arising 
    out of, or in connection with, the performance of the trustee's duties, 
    including all reasonable fees of counsel and other expenses incurred in 
    connection with the preparation for, or defense of any claim, whether 
    or not resulting in any liability, except to the extent that such 
    liabilities, losses, damages, claims, or expenses result from 
    misfeasance, gross negligence, willful or wanton acts, or bad faith by 
    the trustee.
        10. If the trustee ceases to act or fails to act diligently, a 
    substitute trustee shall be appointed in the same manner as provided in 
    Paragraph III.A. of this order.
        11. The Commission or, in the case of a court-appointed trustee, 
    the court, may on its own initiative or at the request of the trustee 
    issue such additional orders or directions as may be necessary or 
    appropriate to accomplish the divestiture required by this order.
        12. The trustee shall have no obligation or authority to operate or 
    maintain the Property to be Divested.
        13. The trustee shall report in writing to Loewen and to the 
    Commission every sixty (60) days concerning the trustee's efforts to 
    accomplish divestiture.
    
    IV.
    
        It is further ordered that, for a period of ten (10) years from the 
    date this order becomes final, Loewen shall not, without providing 
    advance written notification to the Commission, directly or indirectly, 
    through subsidiaries, partnerships, or otherwise.
        A. Acquire any stock, share capital, equity, or other interest in 
    any concern, corporate or non-corporate, engaged at the time of such 
    acquisition, or within the two years preceding such acquisition, in the 
    provision of funerals in Russell County, Virginia or within fifteen (15 
    miles of the Russell County, Virginia line; or
        B. Acquire any assets used for or used in the previous two years 
    for (and still suitable for use for) funeral establishments in Russell 
    County, Virginia or within fifteen (15) miles of the Russell County, 
    Virginia line.
        Said notification shall be given on the Notification and Report 
    Form set forth in the Appendix to Part 803 of Title 16 of the Code of 
    Federal Regulations as amended (hereinafter referred to as ``the 
    Notification''), and shall be prepared and transmitted in accordance 
    with the requirements of that part, except that no filing fee will be 
    required for any such notification, notification shall be filed with 
    the Office of the Secretary of the Commission, notification need not be 
    made to the United States Department of Justice, and notification is 
    required only of Loewen and not of any other party to the transaction. 
    Loewen shall provide the Notification to the Commission at least thirty 
    (30) days prior to acquiring any such interest (hereinafter referred to 
    as the ``first waiting period''). If, within the first waiting period, 
    representatives of the Commission make a written request for additional 
    information, Loewen shall not consumate the acquisition until twenty 
    (20) days after substantially complying with such request for 
    additional information. Early termination of the waiting periods in 
    this paragraph may be requested and, where appropriate, granted by 
    letter from the Commission's Bureau of Competition.
        Provided, however, that prior notification shall not be required by 
    this Paragraph IV of this Order for:
        1. The construction or development by Loewen of a new funeral 
    establishment; or
        2. Any transaction for which notification is required to be made, 
    and
    
    [[Page 25675]]
    
    has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. 
    18a.
    
    V.
    
        It is further ordered that:
        A. Within sixty (60) days after the date this order becomes final 
    and every sixty (60) days thereafter until Loewen has fully complied 
    with the provisions of Paragraphs II or III of this order, Loewen shall 
    submit to the Commission a verified written report setting forth in 
    detail the manner and form in which it intends to comply, is complying, 
    and has complied with Paragraphs II and III of this order. Loewen shall 
    include in its compliance reports, among other things that are required 
    from time to time, a full description of the efforts being made to 
    comply with Paragraphs II and III of the order, including a description 
    of all substantive contacts or negotiations for the divestiture and the 
    identity of all parties contacted. Loewen shall include in its 
    compliance reports copies of all written communications to and from 
    such parties, all internal memoranda, and all reports and 
    recommendations concerning divestiture.
        B. One (1) year from the date this order becomes final, annually 
    for the next nine (9) years on the anniversary of the date this order 
    becomes final, and at other times as the Commission may require, Loewen 
    shall file a verified written report with the Commission setting forth 
    in detail the manner and form in which it has complied and is complying 
    with Paragraph IV of this order. Such reports shall include, but not be 
    limited to, a listing by name and location of all acquisitions of 
    funeral establishments in the United States located within forty (40) 
    miles of a funeral establishment owned by Loewen at the time of the 
    acquisition, including but not limited to acquisitions due to default, 
    foreclosure proceedings or purchases in foreclosure, made by Loewen 
    during the twelve (12) months preceding the date of the report.
    
    VI.
    
        It is further ordered that, for a period of ten (10) years from the 
    date this order becomes final, Loewen shall notify the Commission at 
    least thirty (30) days prior to any proposed change in its 
    organization, such as dissolution, assignment or sale resulting in the 
    emergence of a successor, or the creation or dissolution of 
    subsidiaries, or any other change that may affect compliance 
    obligations arising out of this order.
    
    VII.
    
        It is further ordered that, for the purpose of determining or 
    securing compliance with this order, subject to any legally recognized 
    privilege, upon written request with reasonable notice to Loewen made 
    to its principal officer, Loewen shall permit any duly authorized 
    representative or representatives of the Commission:
        A. Access, during the office hours of Loewen and in the presence of 
    counsel, to inspect and copy all books, ledgers, accounts, 
    correspondence, memoranda and other records and documents in the 
    possession or under the control of Loewen relating to any matters 
    contained in this order; and
        B. Upon five (5) days' notice to Loewen and without restraint or 
    interference therefrom, to interview officers or employees of Loewen, 
    who may have counsel present, regarding such matters.
    
    Appendix I
    
        In the Matter of The Loewen Group Inc., a corporation, and 
    Loewen Group International, Inc., a corporation. File No. 931-0084.
    
    Agreement To Hold Separate
    
        This Agreement to Hold Separate (the ``Agreement'') is by and 
    between The Loewen Group Inc. (``Loewen Group''), a corporation 
    organized and existing under the laws of the province of British 
    Columbia, Canada, with its office and principal place of business 
    located at 4126 Norland Avenue, Burnaby, British Columbia, Canada 
    V5G 3S8; Loewen Bropu International, Inc. (``Loewen Group 
    International''), a wholly-owend subsidiary of Loewen Group, which 
    is a corporation organized and existing under the laws of the State 
    of Delaware, with its office and principal place of business located 
    at 50 East River Center Boulevard, Covington, Kentucky 41011; and 
    the Federal Trade Commission (the ``Commission''), an independent 
    agency of the United States Government, established under the 
    Federal Trade Commission Act of 1914, as amended, 15 U.S.C. 41, et 
    seq. (collectively, the ``Parties'').
    
    Premises
    
        Whereas, on or about January 26, 1993, Loewen Group through its 
    wholly-owned subsidiary Loewen Group International entered into an 
    Agreement with Heritage Family Funeral Services, Inc. (``Heritage'') 
    in which Loewen Group International agreed to acquire Heritage (the 
    ``Acquisition''); and
        Whereas, both Heritage and Loewen Group International own 
    funeral establishments that provide funerals to consumers; and
        Whereas, the Commission is now investigating the Acquisition to 
    determine if the Acquisition would violate any of the statutes 
    enforced by the Commission; and
        Whereas, if the Commission accepts the Agreement Containing 
    Consent Order (the ``Loewen/Heritage Consent Agreement''), the 
    Commission must place the Loewen/Heritage Consent Agreement on the 
    public record for public comment for a period of at least sixty (60) 
    days and may subsequently withtdraw such acceptance pursuant to the 
    provisions of Section 2.34 of the Commission's Rules; and
        Whereas, the Commission is concerned that if an understanding is 
    not reached preserving the status quo ante and holding separate the 
    assets and business of the Property to be Divested pursuant to 
    Paragraph II (hereinafter ``Hold Separate Assets'') of the Loewen/
    Heritage Consent Agreement and the order, once it is final 
    (``Consent Order'') until the divestiture contemplated by the 
    Consent Order has been made, divestiture resulting from any 
    proceeding challenging the legality of the Acquisition might not be 
    possible or might be less than an effective remedy; and
        Whereas, the purposes of this Agreement, the Loewen/Heritage 
    Consent Agreement, and the Consent Order are to:
        (1) Preserve the Hold Separate Assets as a viable independent 
    business pending the divestiture described in the Loewen/Heritage 
    Consent Agreement and Consent Order;
        (2) Preserve the Commission's ability to require the divestiture 
    of the funeral establishment required by the Consent Order; and
        (3) Remedy any anticompetitive aspects of the Acquisition; and
        Whereas, Loewen Group's and Loewen Group International's 
    entering into this Agreement shall in no way be construed as an 
    admission by Loewen Group and Loewen Group International that the 
    Acquisition is illegal; and
        Whereas, Loewen Group and Loewen Group International understand 
    that no act or transaction contemplated by this Agreement shall be 
    deemed immune or exempt from the provisions of the antitrust laws or 
    the Federal Trade Commission Act by reason of anything contained in 
    this Agreement.
        Now, therefore, the Parties agree, upon the understanding that 
    the Commission has not yet determined whether the Acquisition will 
    be challenged, and in consideration of the Commission's agreement 
    that, at the time it accepts the Consent Order for public comment, 
    it will grant early termination of the Hart-Scott-Rodino waiting 
    period, as follows:
        1. Loewen Group and Loewen Group International agree to execute 
    and be bound by the attached Loewen/Heritage Consent Agreement.
        2. Loewen Group and Loewen Group International shall hold the 
    Hold Separate Assets separate and apart from the date this Agreement 
    is accepted until the first to occur of,
        a. Three (3) business days after the Commission withdraws its 
    acceptance of the Loewen/Heritage Consent Agreement pursuant to the 
    provisions of section 2.34 of the Commission's Rules; or
        b. The day after the divestiture required by the Consent Order 
    is accomplished.
        3. Loewen Group's and Loewen Group International's obligation to 
    hold the Hold Separate Assets separate and apart shall be on the 
    following terms and conditions:
        a. The Hold Separate Assets, as they are presently constituted, 
    shall be held separate
    
    [[Page 25676]]
    
    and apart and shall be operated independently of Loewen Group and 
    Loewen Group International except to the extent that Loewen Group 
    and Loewen Group International must exercise direction and control 
    over the Hold Separate Assets to assure compliance with this 
    Agreement, the Loewen/Heritage Consent Agreement, or the Consent 
    Order.
        b. Except as provided herein and as is necessary to assure 
    compliance with this Agreement, the Loewen/Heritage Consent 
    Agreement, and the Consent Order, Loewen Group and Loewen Group 
    International shall not exercise direction or control over, or 
    influence directly or indirectly, the Hold Separate Assets or any of 
    their operations or business.
        c. Loewen Group and Loewen Group International shall cause the 
    Hold Separate Assets to continue using their present name and trade 
    name, and shall maintain and preserve the viability and 
    marketability of the Hold Separate Assets and shall not sell, 
    transfer, encumber (other than in the normal course of business), or 
    otherwise impair their marketability or viability.
        d. Loewen Group and Loewen Group International shall refrain 
    from taking any actions that may cause any material adverse change 
    in the business or financial conditions of the Hold Separate Assets.
        e. Loewen Group and Loewen Group International shall not change 
    the composition of the management of the Hold Separate Assets, 
    except that Loewen Group and Loewen Group International shall have 
    the power to fill vacancies and remove management for cause.
        f. Loewen Group and Loewen Group International shall maintain 
    separate financial and operating records and shall prepare separate 
    quarterly and annual financial statements for the Hold Separate 
    Assets and shall provide the Commission with such statements for the 
    funeral establishment within ten days of their availability.
        g. Except as required by law, and except to the extent that 
    necessary information is exchanged in the course of evaluating the 
    Acquisition, defending investigations or litigation, or negotiating 
    agreements to dispose of assets, Loewen Group and Loewen Group 
    International shall not receive or have access to, or the use of, 
    any of the Hold Separate Assets' ``material confidential 
    information'' not in the public domain, except as such information 
    would be available to Loewen Group and Loewen Group International in 
    the normal course of business if the Acquisition had not taken 
    place. Any such information that is obtained pursuant to this 
    subparagraph shall only be used for the purpose set out in this 
    subparagraph. (``Material confidential information,'' as used 
    herein, means competitively sensitive or proprietary information not 
    independently known to Loewen Group and Loewen Group International 
    from sources other than Heritage, and includes but is not limited to 
    pre-need customer lists, prices quoted by suppliers, or trade 
    secrets.)
        h. All earnings and profits of the Hold Separate Assets shall be 
    held separately. If necessary, Loewen Group and Loewen Group 
    International shall provide the Hold Separate Assets with sufficient 
    working capital to operate at their current rate of operation.
        i. Loewen Group and Loewen Group International shall refrain 
    from, directly or indirectly, encumbering, selling, disposing of, or 
    causing to be transferred any assets, property, or business of the 
    Hold Separate Assets, except that the Hold Separate Assets may 
    advertise, purchase merchandise and sell or otherwise dispose of 
    merchandise in the ordinary course of business.
        4. Should the Federal Trade Commission seek in any proceeding to 
    compel Loewen Group and Loewen Group International to divest 
    themselves of the shares of Heritage stock that they may acquire, or 
    to compel Loewen Group and Loewen Group International to divest any 
    assets or businesses of Heritage that they may hold, or to seek any 
    other injunctive or equitable relief, Loewen Group and Loewen Group 
    International shall not raise any objection based upon the 
    expiration of the applicable Hart-Scott-Rodino Antitrust 
    Improvements Act waiting period or the fact that the Commission has 
    permitted the Acquisition. Loewen Group and Loewen Group 
    International also waive all rights to contest the validity of this 
    Agreement.
        5. For the purpose of determining or securing compliance with 
    this Agreement, subject to any legally recognized privilege, and 
    upon written request with reasonable notice to Loewen Group and 
    Loewen Group International made to their principal offices, Loewen 
    Group and Loewen Group International shall make available to any 
    duly authorized representative or representatives of the Commission:
        a. All books, ledgers, accounts, correspondence, memoranda, and 
    other records and documents in the possession or under the control 
    of Loewen Group and Loewen Group International, for inspection and 
    copying during office hours and in the presence of counsel; and
        b. Upon five (5) days' notice to Loewen Group and Loewen Group 
    International and without restraint or interference from Loewen 
    Group or Loewen Group International, officers or employees of Loewen 
    Group and Loewen Group International, who may have counsel present, 
    for interviews regarding any such matters.
        6. This agreement shall not be binding until approved by the 
    Commission.
    
    Analysis of Proposed Consent Order To Aid Public Comment
    
        The Federal Trade Commission has accepted an agreement, subject to 
    final approval, to a proposed consent order from The Loewen Group Inc. 
    and Loewen Group International, Inc. (hereinafter collectively referred 
    to as ``Loewen'').
        The proposed consent order has been placed on the public record for 
    sixty (60) days for reception of comments from interested persons. 
    Comments received during this period will become part of the public 
    record. After sixty (60) days, the Commission will again review the 
    agreement and the comments received and will decide whether to withdraw 
    from the agreement or make final the agreement's proposed order.
        The Commission's complaint in this matter charges Loewen with 
    violating Section 5 of the Federal Trade Commission Act, as amended, 
    and Section 7 of the Clayton Act, as amended, in connection with 
    Loewen's proposed acquisition of Castlewood Funeral Home, in 
    Castlewood, Virginia.
        The consent order contains provisions designed to remedy the 
    alleged violations.
        Part I of the order contains the definitions of terms that are used 
    in the order.
        Part II of the order requires that within nine (9) months of the 
    date that Loewen acquires Castlewood Funeral Home, Loewen must divest 
    Castlewood Funeral Home.
        Part III of the order provides for the appointment of a trustee to 
    accomplish the divestiture required by the order if Loewen fails to 
    make a timely divestiture.
        Part IV of the order requires Loewen, for ten (10) years, to 
    provide written notification to the Commission prior to acquiring any 
    interest in a funeral home located in Russell County, Virginia, or 
    within fifteen (15) miles of the Russell County, Virginia, line.
        Part V of the order requires Loewen to provide periodic compliance 
    reports until the divestiture is completed. Part V also requires 
    Loewen, for ten (10) years, to provide annual compliance reports 
    detailing how it is complying with Part IV of the order.
        Part VI of the order requires Loewen, for ten (10) years, to notify 
    the Commission of any changes in corporate structure that might affect 
    compliance with the order.
        Part VII of the order permits Commission representatives, for the 
    purpose of determining or securing compliance with the order, to have 
    access to Loewen's offices to inspect and copy documents and, upon five 
    days' notice, to interview Loewen's officers and employees.
        Appendix I to the order is an Agreement to Hold Separate in which 
    Loewen has agreed to hold separate and preserve the assets of 
    Castlewood Funeral Home until Loewen divests the home.
        The purpose of this analysis is to facilitate public comment on the 
    proposed order. It is not intended to constitute an official 
    interpretation of
    
    [[Page 25677]]
    
    the agreement and proposed order, or to modify any of their terms.
    Donald S. Clark,
    Secretary.
    [FR Doc. 96-12818 Filed 5-21-96; 8:45 am]
    BILLING CODE 6750-01-M
    
    

Document Information

Published:
05/22/1996
Department:
Federal Trade Commission
Entry Type:
Notice
Action:
Proposed consent agreement.
Document Number:
96-12818
Dates:
Comments must be received on or before July 22, 1996.
Pages:
25672-25677 (6 pages)
Docket Numbers:
File No. 931-0084
PDF File:
96-12818.pdf