Celanese Settles Legacy Lawsuit | Chemical & Engineering News
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Web Date: June 16, 2008

Celanese Settles Legacy Lawsuit

Firm agrees to pay $107 million to resolve polyester fiber price-fixing claims
Department: Business

Celanese has agreed to pay $107 million to settle claims that it participated in a scheme to fix prices, rig bids, and allocate customers of polyester staple fiber sold in the U.S.

About 30 textile mills that used the fiber to make fabric charged that Celanese had engaged in anticompetitive behavior prior to 1998, when the firm sold its polyester staple fiber business to Koch Industries. Koch combined the Celanese fiber businesses in 2004 with DuPont's former Invista textile fiber operations.

Celanese says the settlement resolves a ???substantial portion of the company's potential exposure??? to legacy polyester fiber claims. Celanese was spun off from Hoechst in 1999 and retained the polyester price-fixing liabilities. Still pending are claims by Koch against Celanese for indemnification in the price-fixing scheme.

Price-fixing charges have dogged polyester producers in the past. A 2002 Justice Department investigation into polyester price fixing led to the indictments of Nan Ya Plastics and Koch executives. Koch's KoSa fibers business eventually paid the government a $29 million fine to settle price-fixing charges. Another fiber producer, Wellman, paid $32 million in recent years to settle civil suits bought by fiber buyers.

Separately, Celanese says it will sell its ownership interest in several German industrial parks in which it no longer has manufacturing operations. Those industrial parks, in Knapsack, Gendorf, and Wiesbaden, contributed $9 million to Celanese's pretax 2007 earnings. Infraserv Hoechst, the former Hoechst site-service operations unit, operates the three industrial locations.

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