[Federal Register Volume 61, Number 100 (Wednesday, May 22, 1996)]
[Notices]
[Pages 25677-25680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12819]
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FEDERAL TRADE COMMISSION
[File No. 931-0052]
The Loewen Group, Inc.; Loewen Group International, Inc.;
Proposed Consent Agreement With Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In the settlement of alleged violations of federal law
prohibiting unfair or deceptive acts or practices and unfair methods of
competition, this consent agreement, accepted subject to final
Commission approval, would require, among other things, the Covington,
Kentucky-based company to divest one of its three funeral homes in
Brownsville, Texas and divest a large funeral home in San Benito, Texas
or two smaller funeral homes in Harlingen, Texas. The Consent Agreement
settles allegations that Lowen's acquisition of certain funeral homes
in the Brownsville area and the Harlingen/San Benito area of Cameron
County, Texas would decrease competition and increase the likelihood of
collusion in those markets.
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) 767-5512.
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)).
Agreement Containing Consent Order
The Federal Trade Commission (``Commission'') having initiated an
investigation of the acquisition of the assets of Garza Memorial
Funeral Home, Inc. and Thomae-Garza Funeral Directors, 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
context 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 event it will take
such action as it may consider appropriate, or issue and serve its
complaint (in such form as 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, 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 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.
[[Page 25678]]
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 and conveyance of the body
to a cemetery or crematory for final disposition.
C. ``Funeral establishment'' means any facility that provides
funerals.
D. ``Properties to be Divested'' means all of the assets,
properties, business and goodwill, tangible and intangible, utilized
by: (a) either Thomae-Garza Funeral Directors, Inc. or both Pitts,
Kriedler-Ashcraft Funderal Directors, Inc. and Garza-Elizondo Funeral
Directors in Cameron County, Texas; and (b) either Garza Memorial
Funeral Home, Inc., Paragon Trevino Funeral Home, Inc., or Darling-
Mouser Funeral Home, Inc. in Cameron County, Texas; 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;
4. All right, title and interest in the books, records and files
pertinent to the Properties 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 twelve (12) months after the date this order becomes
final, Loewen shall divest, absolutely and in good faith, the
Properties to be Divested. The Properties to be Divested are 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 divestitures
required by this order is to ensure the continued use of the Properties
to be Divested as ongoing viable enterprises providing funerals and to
remedy the lessening of competition alleged in the Commission's
complaint.
B. Pending divestiture of the Properties to be Divested, Loewen
shall maintain the viability and marketability of the Properties to be
Divested and shall not cause or permit the destruction, removal, or
impairment of any assets or business of the Properties to be Divested,
except in the ordinary course of business and except for ordinary wear
and tear.
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 Properties to be Divested as
required by Paragraph II of this order within twelve (12) months after
the date this order becomes final, the Commission may appoint a trustee
to divest the Properties to be Divested. In the event the Commission or
the Attorney General brings an action pursuant to Section 5(1) of the
Federal Trade Commission Act, 15 U.S.C. Sec. 45(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 Loewen has not opposed, in writing, the selection
of any proposed trustee within ten (10) days after notice by the staff
of the Commission to 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 Properties
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 Properties to be Divested or to become a director,
officer, employee, agent or representative of any acquirer of the
Properties 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 trustee all rights and powers necessary
to permit the trustee to effect the divestitures 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 divestitures, 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 Properties 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 divestitures. Any delays in divestiture caused by
Loewen shall extend the time
[[Page 25679]]
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
divestitures 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 divestitures 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 Properties 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 divestitures required by this order.
12. The trustee shall have no obligation or authority to operate or
maintain the Properties 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 Cameron County, Texas or within fifteen (15)
miles of the Cameron County, Texas 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 Cameron
County, Texas or within fifteen (15) miles of the Cameron County, Texas
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 consummate 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 has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C.
Sec. 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 divestitures 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
[[Page 25680]]
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, and upon written request with reasonable notice to Loewen
made to its principal offices, 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.
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 acquisitions of Garza Memorial Funeral Home, Inc., in
Brownsville, Texas, and Thomae-Garza Funeral Directors, Inc., in San
Benito, Texas.
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 twelve (12) months of the
date that the order becomes final, Loewen must divest: (1) either
Thomae-Garza Funeral Directors, Inc., or both Pitts, Kriedler-Ashcraft
Funeral Directors, Inc., and Garza-Elizondo Funeral Directors; and (2)
Garza Memorial Funeral Home, Inc., or Paragon Trevino Funeral Home,
Inc., or Darling-Mouser Funeral Home, Inc.
Part III of the order provides for the appointment of a trustee to
accomplish the divestitures required by the order if Loewen fails to
make timely divestitures.
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 Cameron County, Texas, or within
fifteen (15) miles of the Cameron County, Texas, line.
Part V of the order requires Loewen to provide periodic compliance
reports until the divestitures are 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.
The purpose of this analysis is to facilitate public comment on the
proposed order. It is not intended to constitute an official
interpretation of the agreement and proposed order, or to modify any of
their terms.
Donald S. Clark,
Secretary.
[FR Doc. 96-12819 Filed 5-21-96; 8:45 am]
BILLING CODE 6750-01-M
