Court Reduces Horizon Lines' Fine for Fixing Freight Prices to $15M
Horizon Lines, Inc. announced on April 28, 2011 that a federal court has granted a request by the Department of Justice to reduce Horizon’s fine for its role in a conspiracy to fix prices in the coastal water freight transportation industry from $45 million to $15 million.
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Horizon Plead Guilty to Fixing Rates & Surcharges for Water Transport
Horizon had plead guilty to charges that it and co-conspirators had engaged in a conspiracy to fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental U.S. and Puerto Rico. Horizon and co-conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates, and sold Puerto Rico freight services at collusive and noncompetitive rates.
(See ITT's Online Archives or 02/25/11 news, 11022522, for BP summary of DOJ's press release on this case.)
Company Says Reduced Fine Means It is No Longer Facing Default
As a result of the reduced fine, Horizon states it is no longer facing the prospect of a May 21, 2011, default under its convertible note indenture. The company could have been declared in default by the convertible note holders on any judgment over $15 million that the company was unable to pay, bond, or otherwise discharge in full within 60 days of the March 22, 2011 judgment.
(Horizon Lines LLC transports a variety of cargo shipments, such as heavy equipment, medicines and consumer goods, on scheduled ocean voyages between the continental U.S. and Puerto Rico.)