United States v. Interstate Bakeries Corp. and Continental Baking Co.; Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Interstate Bakeries Corp. and Continental Baking

Co.; Proposed Final Judgment and Competitive Impact Statement

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Consent

Judgment, Stipulation, and Competitive Impact Statement have been filed

with the United States District Court for the Northern District of

Illinois, Eastern Division in a civil antitrust case, United States v.

Interstate Bakeries Corp. and Continental Baking Co., Civ. No. 95 C

4194.

On July 20, 1995, the United States filed a Complaint seeking to

enjoin a transaction by which Interstate agreed to acquire Continental.

Continental and Interstate are the country's first and third largest

wholesale commercial bakers and producers of white pan bread (``plain

old white bread''). The Complaint alleged that the proposed acquisition

would substantially lessen competition in the sale of white pan bread

in five markets (Chicago, Milwaukee, central Illinois (Springfield,

Peoria, Champaign/Urbana), San Diego, and Los Angeles) in violation of

section 7 of the Clayton Act, 15 U.S.C. 18.

The proposed Final Judgment requires defendants to divest such

brand names and possibly other assets as are necessary to create a new

competitor in the sale of white pan bread in each of the five markets.

If the required divestitures are not accomplished within nine months,

the Court will appoint a trustee to complete the sales. The Hold

Separate Stipulation and Order is intended to facilitate the

divestitures by requiring defendants to hold separate and maintain

certain products and plans as economically viable assets pending

possible divestiture. A Competitive Impact Statement filed by the

United States describes the Complaint, the proposed Final Judgment, and

remedies available to private litigants.

The public is invited to comment to the Justice Department and to

the Court. Comments should be addressed to Anthony V. Nanni, Chief,

Litigation I Section, U.S. Department of Justice, Antitrust Division,

1401 H Street NW., Room 4000, Washington, DC 20530 (telephone: (202)

307-0207). Comments must be received within sixty days.

Copies of the Complaint, Hold Separate Stipulation and Order,

proposed Final Judgment, and Competitive Impact Statement are available

for inspection in Room 207 of the U.S.Department of Justice, Antitrust

Division, 325 7th Street, NW., Washington, DC 20530 (telephone: (202)

514-2841), and at the office of the Clerk of the United States District

Court for the Northern District of Illinois, Eastern Division, 219 S.

Dearborn, 20th Floor, Chicago, Illinois, 60604. Copies of these

materials may be obtained upon request and payment of a copying fee.

Constance K. Robinson,

Director of Operations.

Civil Action No.: 95C 4194

Filed: 7/20/95

Judge Manning

Hold Separate Stipulation and Order

It is hereby stipulated and agreed by and between the undersigned

parties, subject to approval and entry by the Court, that:

I. Definitions

As used in this Stipulation and Order:

A. ``Associated Assets'' means:

(1) All labels used on White Pan Bread in the Relevant Territories;

[[Page 40196]]

(2) All land, buildings, fixtures, machinery and equipment related

to the plant;

(3) All trucks and other vehicles, depots or warehouses, and thrift

stores utilized by defendants in the distribution of White Pan Bread in

the Relevant Territories; and

(4) All route books, customer lists, and other records used in the

defendants' day-to-distribution of White Pan Bread in the Relevant

Terrorities.

B. ``Label'' means all legal rights associated with a brand's

trademarks, trade names, copyrights, designs, and trade dress, the

brand's trade secrets; the brand's production knowhow, including, but

not limited to, recipes and formulas used to produce bread sold under

the label; and packagaging, marketing and distribution knowhow and

documentation, such as customer lists and route maps, associated with

the brand.

C. ``Continental'' means Continental Baking Company, each division

or subsidiary thereof, and each officer, director, employee, attorney,

agent, successor or assignee, or other person acting for or on behalf

of any of them.

D. ``Interstate'' means Interstate Bakeries Corporation, each

division or subsidiary thereof, and each officer, director, employee,

attorney, agent, successor or assignee, or other person acting for or

on behalf of any of them.

E. ``Interstate's Chicago Plant'' means the Interstate bread

production facility located in Chicago, Illinois and its Associated

Assets.

F. ``Interstate's Southern California Plant'' means the Interstate

bread production facility located in Glendale, California and its

Associated Assets.

G. ``Interstate's Central Illinois Plants'' means the Interstate

bread production facility located in Decatur, Illinois and the

Interstate bread production facility located in Peoria, Illinois and

their Associated Assets.

H. ``Continental's Chicago Plant'' means the Continental bread

production facility located in Hodgkins, Illinois and its Associated

Assets.

I. ``Continental's Southern California Plant'' means the

Continental bread production facility located in Pomona, California and

its Associated Assets.

J. ``Eastern Wisconsin Territory'' means Adams, Brown, Calumet,

Columbia, Dane, Dodge, Door, Fond du Lac, Forest, Florence, Green,

Green Lake, Jefferson, Kenosha, Kewaunee, Langlade, Manitowoc,

Marinette, Marquette, Menominee, Milwaukee, Oconto, Outagamie, Ozaukee,

Portage, Racine, Rock, Shawano, Sheboygan, Walworth, Washington,

Waukesha, Waupaca, Waushara, and Winnebago counties in the state of

Wisconsin.

K. ``Chicago Territory'' means Boone, Cook, DeKalb, Du Page,

Grundy, JoDaviess, Kane, Kankakee, Kendall, Lake, Lee, McHenry, Ogle,

Stephenson, Will, and Winnebago counties in the state of Illinois, and

Lake and Porter counties in the state of Indiana.

L. ``Central Illinois Territory'' means Adams, Bond, Brown, Bureau,

Calhoun, Carroll, Cass, Champaign, Christian, Clark, Clay, Clinton,

Coles, Crawford, Cumberland, De Witt, Douglas, Edgar, Edwards,

Effingham, Fayette, Ford, Fulton, Greene, Hancock, Henderson, Henry,

Iroquois, Jasper, Jersey, Knox, La Salle, Lawrence, Livingston, Logan,

Macon, Macoupin, Madison, Marion, Marshall, Mason, McDonough, McLean,

Menard, Mercer, Montgomery, Morgan, Moultrie, Peoria, Piatt, Pike,

Putnam, Richland, Rock Island, Sangamon, Schuyler, Scott, Shelby,

Stark, Tazewell, Vermilion, Wabash, Warren, Wayne, Whiteside, and

Woodford counties in the state of Illinois.

M. ``Southern California Territory'' means Imperial, Los Angeles,

Orange, Riverside, San Bernadino, and San Diego counties in the state

of California.

N. ``Relevant Territories'' means the Chicago, Eastern Wisconsin,

Southern California, and Central Illinois Territories.

O. ``White Pan Bread'' means white bread baked in a pan but shall

not include hamburger and hot dog buns, or variety breads such as

French bread and Italian bread.

II. Objectives

The Final Judgment filed in this case is meant to ensure

defendants' prompt divestitures for the purpose of establishing viable

competitors in the sale of White Pan Bread to remedy the

anticompetitive effects that the United States alleges would otherwise

result from the acquisition of Continental by Interstate. This Hold

Separate Stipulation and Order ensures, prior to such divestitures,

that certain Interstate and Continental labels, plants and marketing

and sales operations that compete in the Relevant Territories are

maintained as independent, economically viable, ongoing business

concerns, and that competition is maintained during the pendency of the

divestitures.

III. Hold Separate Provisions

Until the divestitures required by the Final Judgment have been

accomplished:

A. Defendants shall preserve, maintain, and continue to operate

Continental's Chicago and Southern California Plants as independent

competitors with management and operations held entirely separate,

distinct and apart from those of Interstate. Defendants shall not

coordinate the production, marketing or terms of sale of Continental's

bread products with Interstate's bread products in the Relevant

Territories. Within thirty (30) days of the entering of this Order,

defendants shall inform plaintiff of steps taken to comply with this

provision.

B. Defendants shall take all steps necessary to ensure that

Interstate's Chicago, Southern California and Central Illinois Plants

and Continental's Chicago and Southern California Plants will be

maintained as economically viable, ongoing business concerns.

Defendants shall use all reasonable efforts to maintain and increase

the sales of Interstate's and Continental's White Pan Bread and other

bread products in the Relevant Territories and otherwise maintain these

businesses as active competitors in the Relevant Territories.

C. Defendants shall provide capital and provide and maintain

sufficient working capital to maintain Interstate's Chicago, Southern

California, and Central Illinois Plants and Continental's Chicago and

Southern California Plants as economically viable, ongoing businesses,

consistent with the requirements of Sections III(A) and (B).

D. Defendants shall not sell, lease, assign, transfer or otherwise

dispose of, or pledge as collateral for loans, assets that may be

required to be divested pursuant to the Final Judgment.

E. Defendants shall preserve the assets that may be required to be

divested pursuant to the Final Judgment in a state of repair equal to

their state of repair as of the date of this Hold Separate Stipulation

and Order, ordinary wear and tear excepted.

F. Defendant shall maintain, in accordance with sound accounting

principles, separate, accurate and complete financial ledgers, books

and records that report on a periodic basis, such as every four weeks

or every month, consistent with past practices, the assets,

liabilities, expenses, revenues and income of Interstate's Chicago,

Southern California and Central Illinois Plants and Continental's

Chicago and Southern California Plants.

G. The production, pricing and promotional plans specific to

Interstate's Chicago, Southern California, or Central Illinois Plants

will not be transferred or otherwise made available to persons having

direct sales or marketing responsibility for Continental's marketing

and sales of

[[Page 40197]]

White Pan Bread in any Relevant Territory; and the production, pricing

and promotional plans specific to Continental's Chicago or Southern

California Plants, or to Continental's marketing and sales of White Pan

Bread in any Relevant Territory, will not be transferred or otherwise

made available to persons having direct sales or marketing

responsibility for Interstate's marketing and sales of White Pan Bread

in any Relevant Territory, unless needed to comply with other

provisions of this Order.

H. Except in the ordinary course of business, or as is otherwise

consistent with the requirements of Sections III(A) and (B), defendants

shall not transfer or terminate, or alter any current employment or

salary agreements for, any executive-level management, sales,

marketing, or engineering personnel of Interstate's Chicago, Southern

California, or Central Illinois Plants or Continental's Chicago or

Southern California Plants.

I. Defendants shall not in anyway inhibit the ability of any

licensee or purchaser under the Final Judgment from hiring any person

currently an employee of defendants' at any plant that may be divested

pursuant to the Final Judgment.

J. Defendants shall take no action that would interfere with the

ability of any trustee appointed pursuant to the Final Judgment to

complete the divesture pursuant to the Final Judgment to a suitable

purchaser or purchasers.

K. This Hold Separate Stipulation and Order shall remain in effect

as to each Relevant Territory pending consummation of the divestitures

contemplated by the proposed Final Judgment as to that Relevant

Territory, or until further Order of the Court.

Respectfully submitted,

Dated:

For Plaintiff United States of America:

Anne K. Bingaman,

Assistant Attorney General.

Arnold C. Celnicker

Lawrence R. Fullerton

Charles R. Schwidde

Charles Biggio

Anthony Harris

Illinois Bar #01133713

Constance K. Robinson

Evangelina Almirantearena

Anthony V. Nanni

Maurice Stucke

Willie L. Hudgins

Attorneys, U.S. Department of Justice Antitrust Division.

James B. Burns,

U.S. Attorney, N.D. Illinois.

For Defendant Interstate Bakeries Corporation

Terry M. Grimm

For Defendant Continental Baking Company

Jay W. Brown

It is so ordered this 20th day of July, 1995.

Blanche M. Manning,

United States District Court Judge.

Stipulation

It is stipulated by and between the undersigned parties, by their

respective attorneys, that:

1. The Court has jurisdiction over the subject matter of this

action and over each of the parties hereto, and venue of this action is

proper in the Northern District of Illinois.

2. The parties consent that a Final Judgment in the form hereto

attached may be filed and entered by the Court, upon the motion of any

party or upon the Court's own motion, at any time after compliance with

the requirements of the Antitrust Procedures and Penalties Act (15

U.S.C. 16 (b)-(h)), and without further notice to any party or other

proceedings, provided that plaintiff has not withdrawn its consent,

which it may do at any time before the entry of the proposed Final

Judgment by serving notice thereof on the defendants and by filing that

notice with the Court.

3. The parties shall abide by and comply with the provisions of the

proposed Final Judgment pending entry of the Final Judgment, and shall,

from the date of the filing of this Stipulation, comply with all the

terms and provisions thereof as though the same were in full force and

effect as an order of the Court.

4. The parties shall abide by and comply with the provisions of the

Hold Separate Stipulation and Order pending entry of the Hold Separate

Stipulation and Order, and shall, from the date of the filing of this

Stipulation, comply with all the terms and provisions thereof as though

the same were in full force and effect as an order of the Court.

5. In the event plaintiff withdraws its consent or if the proposed

Final Judgment is not entered pursuant to this Stipulation, this

Stipulation shall be of no effect whatever and the making of this

Stipulation shall be without prejudice to any party in this or any

other proceeding.

Dated:

Respectfully submitted.

For Plaintiff United States of America

Anne K. Bingaman,

Assistant Attorney General.

Arnold C. Celnicker

Lawrence R. Fullerton

Charles R. Schwidde

Charles Biggio

Anthony Harris

Illinois Bar #01133713

Constance K. Robinson

Evangelina Almirantearena

Anthony V. Nanni

Maurice Stucke

Willie L. Hudgins

Attorneys, U.S. Department of Justice, Antitrust Division.

James B. Burns,

U.S. Attorney, N.D. Illinois.

For Defendant Interstate Bakeries Corporation

Terry M. Grimm

For Defendant Continental Baking Company

Jay W. Brown

So Ordered.

United States District Judge

Final Judgment

WHEREAS, plaintiff, United States of America, having filed its

Complaint herein on July 20, 1995, and plaintiff and defendants, by

their respective attorneys, having consented to the entry of this Final

Judgment without trial or adjudication of any issue of fact or law

herein, and without this Final Judgment constituting any evidence

against or an admission by any party with respect to any issue of law

or fact herein;

AND WHEREAS, defendants have agreed to be bound by the provisions

of this Final Judgment pending its approval by the Court;

AND WHEREAS, prompt and certain divestiture of certain rights or

assets and prompt implementation of the Hold Separate Stipulation And

Order to assure that competition is not substantially lessened are the

essence of this agreement;

AND WHEREAS, the parties intend to require defendants to make

certain

[[Page 40198]]

divestitures for the purpose of establishing viable competitors in the

sale of White Pan Bread;

AND WHEREAS, defendants have represented to plaintiff that the

divestitures required below can and will be made and that defendants

will later raise no claims of hardship or difficulty as ground for

asking the Court to modify any of the divestiture provisions contained

below;

NOW, THEREFORE, before the taking of any testimony, and without

trial or adjudication of any issue of fact or law herein, and upon

consent of the parties hereto, it is hereby ORDERED, ADJUDGED, AND

DECREED as follows:

I. Jurisdiction

This Court has jurisdiction over each of the parties hereto and the

subject matter of this action. The Complaint states a claim upon which

relief may be granted against the defendants under section 7 of the

Clayton Act, as amended (15 U.S.C. 18).

II. Definitions

As used in this Final Judgment:

A. ``Interstate'' means defendant Interstate Bakeries Corporation,

a Delaware corporation with its headquarters in Kansas City, Missouri,

and includes its successors and assigns, and its subsidiaries,

directors, officers, managers, agents, and employees.

B. ``Continental'' means defendant Continental Baking Company, a

Delaware corporation with its headquarters in St. Louis, Missouri, and

includes its successors and assigns, and its subsidiaries, directors,

officers, managers, agents, and employees.

C. ``Bread Assets'' means:

(1) Either the Mrs. Karl's Label or the Wonder Label for all bread

products except White Pan Bread in the Eastern Wisconsin Territory;

(2) Either the Butternut Label or the Wonder Label for all bread

products except White Pan Bread in the Chicago Territory;

(3) Either the Butternut Label or the Sunbeam Label or the Wonder

Label for all bread products except White Pan Bread in the Central

Illinois Territory;

(4) Either the Weber's Label or the Wonder Label for all bread

products except White Pan Bread in the Southern California Territory;

(5) Either the Interstate plant located in Chicago, Illinois or the

Continental plant located in Hodgkins, Illinois;

(6) Either the Interstate plant located in Glendale, California or

the Continental plant located in Pomona, California;

(7) Either the Interstate plant located in Decatur, Illinois or the

Interstate plant located in Peoria, Illinois;

(8) All land, buildings, fixtures, machinery and equipment related

to the above plants;

(9) All trucks and other vehicles, depots or warehouses, and thrift

stores utilized by defendants in the distribution of bread products

under the Relevant Labels in the Relevant Territories; and

(10) All route books, customer lists, and other records used in the

defendants' day-to-day distribution of bread products under the

Relevant Labels in the Relevant Territories.

D. ``Label'' means all legal rights associated with a brand's

trademarks, trade names, copyrights, designs, and trade dress; the

brand's trade secrets; the brand's production knowhow, including, but

not limited to, recipes and formulas used to produce bread sold under

the brand; and packaging, marketing and distribution know how and

documentation, such as customer lists and route maps, associated with

the brand.

E. ``Eastern Wisconsin Territory'' means Adams, Brown, Calumet,

Columbia, Dane, Dodge, Door, Fond du Lac, Forest, Florence, Green,

Green Lake, Jefferson, Kenosha, Kewaunee, Langlade, Manitowoc,

Marinette, Marquette, Menominee, Milwaukee, Oconto, Outagamie, Ozaukee,

Portage, Racine, Rock, Shawano, Sheboygan, Walworth, Washington,

Waukesha, Waupaca, Waushara, and Winnebago counties in the state of

Wisconsin.

F. ``Chicago Territory'' means Boone, Cook, DeKalb, Du Page,

Grundy, JoDaviess, Kane, Kankakee, Kendall, Lake, Lee, McHenry, Ogle,

Stephenson, Will, and Winnebago counties in the state of Illinois, and

Lake and Porter counties in the state of Indiana.

G. ``Central Illinois Territory'' means Adams, Bond, Brown, Bureau,

Calhoun, Carroll, Cass, Champaign, Christian, Clark, Clay, Clinton,

Coles, Crawford, Cumberland, De Witt, Douglas, Edgar, Edwards,

Effingham, Fayette, Ford, Fulton, Greene, Hancock, Henderson, Henry,

Iroquois, Jasper, Jersey, Knox, La Salle, Lawrence, Livingston, Logan,

Macon, Macoupin, Madison, Marion, Marshall, Mason, McDonough, McLean,

Menard, Mercer, Montgomery, Morgan, Moultrie, Peoria, Piatt, Pike,

Putnam, Richland, Rock Island, Sangamon, Schuyler, Scott, Shelby,

Stark, Tazewell, Vermilion, Wabash, Warren, Wayne, Whiteside, and

Woodford counties in the state of Illinois.

H. ``Southern California Territory'' means Imperial, Los Angeles,

Orange, Riverside, San Bernadino, and San Diego counties in the state

of California.

I. ``Relevant Labels'' means:

(1) Either the Mrs. Karl's Label or the Wonder Label for White Pan

Bread in the Eastern Wisconsin Territory;

(2) Either the Butternut Label or the Wonder Label for White Pan

Bread in the Chicago Territory;

(3) Either the Butternut Label or the Sunbeam Label or the Wonder

Label for White Pan Bread in the Central Illinois Territory; and

(4) Either the Weber's Label or the Wonder Label for White Pan

Bread in the Southern California Territory.

J. ``Relevant Territories'' means the Chicago Territory, the

Eastern Wisconsin Territory, the Central Illinois Territory and the

Southern California Territory.

K. ``White Pan Bread'' means white bread baked in a pan but shall

not include hamburger and hot dog buns, or variety breads such as

French bread and Italian bread.

III. Applicability

A. The provisions of this Final Judgment apply to the defendants,

their successors and assigns, their subsidiaries, directors, officers,

managers, agents, and employees, and all other persons in active

concert or participation with any of them who shall have received

actual notice of this Final Judgment by personal service or otherwise.

B. Defendants shall require, as a condition of the sale or other

disposition of all or substantially all of the Relevant Labels and the

Bread Assets, that the acquiring party or parties agree to be bound by

the provisions of this Final Judgment.

C. Nothing contained in this Final Judgment is or has been created

for the benefit of any third party, and nothing herein shall be

construed to provide any rights to any third party.

D. The provisions of Section IV through VIII of this Final Judgment

shall not be effective until the consummation of the acquisition of

Continental by Interstate.

IV. Divestiture

A. Defendants are hereby ordered and directed, within nine (9)

months of entry of this Final Judgment, to grant to one or more

purchasers a perpetual, royalty-free, assignable, transferable,

exclusive license to use the Relevant Labels to produce (or have

produced for it) and sell White Pan Bread in the Relevant Territories,

together with such Bread Assets as are reasonably necessary in order

for the acquirer of each Relevant Label to sell White Pan Bread under

each respective Relevant Label at a level substantially equivalent to

the average level of White Pan Bread

[[Page 40199]]

sales of each respective Relevant Label in each Relevant Territory over

the preceding year, and otherwise to remain a viable competitor in the

White Pan Bread market in each Relevant Territory. Defendants shall

cease using a Relevant Label within five (5) days of when a purchaser

commences its use.

B. Defendants agree to take all reasonable steps to accomplish

quickly said divestiture. Plaintiff may, in its sole discretion, extend

the time period for divestiture for an additional period of time not to

exceed two months.

C. In accomplishing the divestiture ordered by this Final Judgment,

the defendants promptly shall make known, by usual and customary means,

the availability of the Relevant Labels. The defendants shall provide

any person making an inquiry regarding a possible purchase with a copy

of the Final Judgment. The defendants shall also offer to furnish to

all bona fide prospective purchasers, subject to customary

confidentiality assurances, all reasonably necessary information

regarding the Relevant Labels, except such information subject to

attorney-client privilege or attorney work product privilege.

Defendants shall provide such information to the plaintiff at the same

time that such information is made available to any other person.

Defendants shall permit prospective purchasers of the Relevant Labels

to have access to personnel and to make such inspection of physical

facilities and any and all financial, operational, or other documents

and information as may be relevant to the divestiture required by this

Final Judgment.

D. Unless the plaintiff otherwise consents, divestiture under

Section IV(A), or by the trustee appointed pursuant to Section V, shall

include such Bread Assets and be accomplished in such a way as to

satisfy plaintiff, in its sole discretion, that the Relevant Labels can

and will be used by the purchaser or purchasers as part of viable,

ongoing businesses engaged in the selling of White Pan Bread at

wholesale to retail grocery stores and other customers. Divestiture

shall be made to a purchaser or purchasers for whom it is demonstrated

to plaintiff's satisfaction that (1) the purchase or purchases are for

the purpose of competing effectively in the selling of White Pan Bread

at wholesale to retail grocery stores and other customers; and (2) the

purchaser or purchasers have the managerial, operational, and financial

capability to compete effectively in the selling of White Pan Bread at

wholesale to retail grocery stores and other customers; and (3) none of

the terms of any agreements between the purchaser or purchasers and

defendants give defendants the ability artificially to raise the

purchaser's or purchasers' costs, lower the purchaser's or purchasers'

efficiency, or otherwise interfere in the ability of the purchaser or

purchasers to compete effectively.

V. Appointment of Trustee

A. If defendants have not accomplished the divestiture required by

Section IV within the time specified therein, defendants shall notify

plaintiff of that fact in writing. Within ten (10) calendar days of

that date, plaintiff shall provide defendants with written notice of

the names and qualifications of not more than two (2) nominees for the

position of trustee for the required divestiture. Defendants shall

notify plaintiff within five (5) calendar days thereafter whether

either or both of such nominees are acceptable. If either or both of

such nominees are acceptable to defendants, plaintiff shall notify the

Court of the person upon whom the parties have agreed and the Court

shall appoint that person as the trustee. If neither nominee is

acceptable to defendants, they shall furnish to plaintiff, within ten

(10) calendar days after plaintiff provides the names of its nominees,

written notice of the names and qualifications of not more than two (2)

nominees for the position of trustee for the required divestiture. If

either or both of such nominees are acceptable to plaintiff, plaintiff

shall notify the Court of the person upon whom the parties have agreed

and the Court shall appoint that person as the trustee. If neither

nominee is acceptable to plaintiff, plaintiff shall furnish the Court

the names and qualifications of its and defendants' proposed nominees.

The Court may hear the parties as to the nominees' qualifications and

shall appoint one of the nominees as the trustee.

B. If defendants have not accomplished the divestiture required by

Section IV of this Final Judgment at the expiration of the time period

specified therein, subject to the selection process described in

Section V(A), the appointment by the Court of the trustee shall become

effective. The trustee shall then take steps to effect divestiture as

specified in Section IV(A). The trustee shall have the right, in its

sole discretion, to include in the package of assets to be divested any

or all of the Bread Assets in addition to the Relevant Labels.

C. After the trustee's appointment has become effective, only the

trustee shall have the right to license the Relevant Labels and to sell

the Bread Assets. The trustee shall have the power and authority to

accomplish the divestiture to a purchaser acceptable to plaintiff at

such price and on such terms as are then obtainable upon the best

reasonable effort by the trustee, subject to the provisions of Section

IV of this Final Judgment, and shall have such other powers as this

Court shall deem appropriate. Defendants shall not object to the

licensing of the Relevant Labels or the sale of the Bread Assets by the

trustee on any ground other than the trustee's malfeasance. Any such

objection by defendants must be conveyed in writing to plaintiff and

the trustee within fifteen (15) calendar days after the trustee has

notified defendants of the proposed licensing and sale in accordance

with Section VI of this Final Judgment.

D. The trustee shall serve at the cost and expense of defendants,

shall receive compensation based on a fee arrangement providing an

incentive based on the price and terms of the divestiture and the speed

with which it is accomplished, and shall serve on such other terms and

conditions as the Court may prescribe; provided however, that the

trustee shall receive no compensation, nor incur any costs or expenses,

prior to the effective date of his or her appointment. The trustee

shall account for all monies derived. After approval by the Court of

the trustee's accounting, including fees for its services, all

remaining monies shall be paid to defendants and the trust shall then

be terminated.

E. Defendants shall take no action to interfere with or impede the

trustee's accomplishment of the divestiture of the Relevant Labels or

the Bread Assets and shall use its best efforts to assist the trustee

in accomplishing the required divestiture. The trustee shall have full

and complete access to the personnel, books, records, and facilities of

defendants' overall businesses, and defendants shall develop such

financial or other information necessary to the divestiture of the

Relevant Labels and the Bread Assets.

F. After its appointment becomes effective, the trustee shall file

monthly reports with the parties and the Court setting forth the

trustee's efforts to accomplish divestiture of the Relevant Labels and

the Bread Assets as contemplated under this Final Judgment; provided

however, that to the extent such reports contain information that the

trustee deems confidential, such reports shall not be filed in the

public docket of the Court. Such reports shall include the name,

address, and telephone number of each person who, during the preceding

month, made an offer to acquire, expressed an interest in

[[Page 40200]]

acquiring, entered into negotiations to acquire, or was contracted or

made an inquiry about acquiring, any interest in the Relevant Labels or

the Bread Assets, and shall describe in details each contact with any

such person during that period. The trustee shall maintain full records

of all efforts made to divest these operations.

G. Within six (6) months after its appointment has become

effective, if the trustee has not accomplished the divestiture required

by Section IV of this Final Judgment, the trustee shall promptly file

with the Court a report setting forth (1) the trustee's efforts to

accomplish the required divestiture, (2) the reasons, in the trustee's

judgment, why the required divestiture has not been accomplished, and

(3) the trustee's recommendations; provided however, that to the extent

such reports contain information that the trustee deems confidential,

such reports shall not be filed in the public docket of the Court. The

trustee shall at the same time furnish such reports to the parties, who

shall each have the right to be heard and to make additional

recommendations consistent with the purpose of the trust. The Court

shall thereafter enter such orders as it shall deem appropriate in

order to carry out the purpose of the trust, which shall, if necessary,

include augmenting the assets to be divested, and extending the trust

and the terms of the trustee's appointment.

VI. Notification

Within two (2) calendar days following execution of a contract,

contingent upon compliance with the terms of this Final Judgment, to

effect, in whole or in part, any proposed divestiture pursuant to

Sections IV or V of this Final Judgment, defendants or the trustee,

whichever is then responsible for effecting the divestiture, shall

notify plaintiff of the proposed divestiture. If the trustee is

responsible, it shall similarly notify defendants. The notice shall set

forth the details of the proposed transaction and list the name,

address, and telephone number of each person not previously identified

who offered to, or expressed an interest in or desire to, acquire any

ownership interest in the business that is the subject of the binding

contract, together with full details of same. Within fifteen (15)

calendar days of receipt by plaintiff of such notice, plaintiff may

request additional information concerning the proposed divestiture and

the proposed purchaser. Defendants and the trustee shall furnish any

additional information requested within twenty (20) calendar days of

the receipt of the request, unless the parties shall otherwise agree.

Within thirty (30) calendar days after receipt of the notice or within

twenty (20) calendar days after plaintiff has been provided the

additional information requested (including any additional information

requested of persons other than defendants or the trustee), whichever

is later, plaintiff shall provide written notice to defendants and the

trustee, if there is one, stating whether or not it objects to the

proposed divestiture. If plaintiff provides written notice to

defendants and the trustee that it does not object, then the

divestiture may be consummated, subject only to defendants' limited

right to object to the sale under the provisions in Section V(C).

Absent written notice that the plaintiff does not object to the

proposed purchaser, a divestiture proposed under Section IV shall not

be consummated. Upon objection by plaintiff, a divestiture proposed

under Section IV shall not be consummated. Upon objection by plaintiff,

or by defendants under the proviso in Section V(C), a divestiture

proposed under Section V shall not be consummated unless approved by

the Court.

VII. Affidavits

Within ten (10) calendar days of the filing of this Final Judgment

and every thirty (30) calendar days thereafter until the divestiture

has been completed or authority to effect divestiture passes to the

trustee pursuant to Section V of this Final Judgment, defendants shall

deliver to plaintiff an affidavit as to the fact and manner of

compliance with Sections IV and V of this Final Judgment. Each such

affidavit shall include the name, address, and telephone number of each

person who, at any time after the period covered by the last such

report, made an offer to acquire, expressed an interest in acquiring,

entered into negotiations to acquire, or was contacted or made an

inquiry about acquiring, any interest in the Relevant Labels or in the

Bread Assets, and shall describe in detail each contact with any such

person during that period. Defendants shall maintain full records of

all efforts made to divest these operations.

VIII. Financing

With prior written consent of the plaintiff, defendants may finance

all or any part of any purchase made pursuant to Sections IV or V of

this Final Judgment.

IX. Preservation of Assets

Until the divestitures required by the Final Judgment have been

accomplished, defendants shall take all steps necessary to comply with

the Hold Separate Stipulation And Order entered by this Court.

Defendants shall take no action that would jeopardize the licensing of

the Relevant Labels or the sale of the Bread Assets.

X. Compliance Inspection

Only for the purpose of determining or securing compliance with the

Final Judgment and subject to any legally recognized privilege, from

time to time:

A. Duly authorized representatives of the Department of Justice,

upon written request of the Attorney General or of the Assistant

Attorney General in charge of the Antitrust Division, and on reasonable

notice to defendants made to its principal office, shall be permitted:

1. Access during office hours of defendants to inspect and copy all

books, ledgers, accounts, correspondence, memoranda, and other records

and documents in the possession or under the control of defendants, who

may have counsel present, relating to enforcement of this Final

Judgment; and

2. Subject to the reasonable convenience of defendants and without

restraint or interference from them, to interview officers, employees,

and agents of defendants, who may have counsel present, regarding any

such matters.

B. Upon the written request of the Attorney General or of the

Assistant Attorney General in charge of the Antitrust Division made to

defendants' principal office, defendants shall submit such written

reports, under oath if requested, with respect to enforcement of this

Final Judgment.

C. No information or documents obtained by the means provided in

this Section X shall be divulged by a representative of the Department

of Justice to any person other than a duly authorized representative of

the Executive Branch of the United States, except in the course of

legal proceedings to which the United States is a party (including

grand jury proceedings), or for the purpose of security compliance with

this Final Judgment, or as otherwise required by law.

D. If at the time information or documents are furnished by

defendants to plaintiff, defendants represent and identify in writing

the material in any such information or documents to which a claim of

protection may be asserted under Rule 26(c)(7) of the Federal Rules of

Civil Procedure, and defendants mark each pertinent page of such

material, ``Subject to claim of protection under Rule 26(c)(7) of the

Federal Rules of Civil Procedure,'' then ten (10) calendar days notice

shall be given by plaintiff to defendants prior to divulging such

material in any legal

[[Page 40201]]

proceeding (other than a grand jury proceeding).

XI. Retention of Jurisdiction

Jurisdiction is retained by this Court for the purpose of enabling

any of the parties to this Final Judgment to apply to this Court at any

time for such further orders and directions as may be necessary or

appropriate for the construction or carrying out of this Final

Judgment, for the modification of any of the provisions hereof, for the

enforcement of compliance herewith, and for the punishment of any

violations hereof.

XII. Termination

Unless this Court grants an extension, this Final Judgment will

expire on the tenth anniversary of the date its entry.

XIII. Public Interest

Entry of this Final Judgment is in the public Interest.

Dated:-----------------------------------------------------------------

----------------------------------------------------------------------

United States District Judge

Competitive Impact Statement

The United States, pursuant to Section 2(b) of the Antitrust

Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files

this Competitive Impact Statement relating to the proposed Final

Judgment submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

The United States filed a civil antitrust Complaint on July 20,

1995, alleging that the proposed acquisition of Continental Baking

Company (``Continental'') by Interstate Bakeries Corporation

(``Interstate'') would violate Section 7 of the Clayton Act, 15 U.S.C.

18. Continental and Interstate are the nation's first and third largest

producers of white pan bread.

The Complaint alleges that the combination of these major

competitors would substantially lessen competition in the production

and sale of white pan bread in five geographic markets: the Chicago

area; the Milwaukee area; central Illinois (i.e., Peoria, Springfield,

Champaign/Urbana); the Los Angeles area and the San Diego area. The

prayer for relief seeks: (1) A judgment that the proposed acquisition

would violate Section 7 of the Clayton Act; and (2) a permanent

injunction preventing Interstate from acquiring control of

Continental's assets or otherwise combining them with its own business

in these five geographic markets.

At the same time that the suit was filed, a proposed settlement was

filed that would permit Interstate to complete its acquisition of

Continental's assets in other parts of the country, yet preserve

competition in the markets in which the transaction would raise

significant competitive concerns. Also filed were a Hold Separate

Stipulation and Order, a Stipulation, and a proposed Final Judgment.

The Hold Separate Stipulation and Order would, in essence, require

Interstate to ensure that, until the divestitures mandated by the Final

Judgment have been accomplished, Continental's bread production and

distribution facilities and ancillary assets located in the affected

markets will be held separate and apart from, and operated

independently of, other Interstate assets and businesses. Moreover,

because the Final Judgment may require Interstate to divest either its

or Continental's plants and ancillary assets in these geographic

markets, until the divestitures are accomplished, Interstate must

preserve and maintain both sets of assets as saleable and economically

viable, ongoing concerns.

The proposed Final Judgment orders defendants to divest to one or

more purchasers certain white pan bread labels in each market.

Additional assets to be divested may include bread production and

distribution facilities and ancillary assets currently used by

Interstate or Continental in each market, as may be required by the

purchaser to be able to sell branded white pan bread at levels

substantially equivalent to the levels existing before the acquisition.

Defendants must complete these divestitures within nine months after

entry of the Final Judgment. If they do not, the Court may appoint a

trustee to sell the assets.

The United States, Interstate, and Continental have stipulated that

the proposed Final Judgment may be entered after compliance with the

APPA. Entry of the proposed Final Judgment would terminate this action,

except the Court would retain jurisdiction to construe, modify, or

enforce the provisions of the proposed Final Judgment and to punish

violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

Interstate, based in Kansas City, Missouri, is the third largest

wholesale baker in the United States. In 1994, it reported total sales

of $1.1 billion. Interstate has 14,000 employees, operates 31

commercial bakeries, and transacts business in 39 states.

Continental, a subsidiary of St. Louis-based Ralston Purina

Company, is the nation's largest wholesale baker. In 1994, Continental

reported total sales of $1.95 billion. It employs 22,000 and operates

35 commercial bakeries that service 80% of the nation's population.

On January 8, 1995, Interstate and Continental announced an

agreement by which Interstate would acquire Continental from its

parent, Ralston Purina Corporation, for cash and stock. This $450

million transaction, which would combine Interstate and Continental,

precipitated the government's suit.

B. The White Pan Bread Industry

White pan bread describes the ubiquitous, white, sliced, soft loaf

known to most consumers as ``plain old white bread.'' An American

household staple, white pan bread is sold in the commercial bread aisle

of every grocery store, convenience store, and mass merchandiser. White

pan bread differs significantly in product attributes from other types

of bread, such as variety bread (e.g., wheat, rye or French) and

freshly baked in-store breads, in taste, texture, uses, perceived

nutritional value, keeping qualities, and appeal to various groups of

consumers. These differing attributes give rise to distinct consumer

preferences for each type of bread. Many children, for instance,

strongly prefer to eat white pan bread, and hence, a primary use of

this bread is for sandwiches in school lunches.

Because of its unique appeal and its distinguishing attributes, a

small but significant increase in the price of white pan bread by all

producers would not be rendered unprofitable by consumers substituting

other breads. White pan bread is, therefore, an appropriate product

market in which to assess the competitive effects of the acquisition.

White pan bread is mass produced on high speed production lines by

wholesale commercial bakers,\1\ who package and sell it to retailers

under either their own brand or a private label (i.e., a brand

controlled by a grocery chain or buying cooperative). Though physically

similar to private label, branded white pan bread is perceived by

consumers as fresher, better tasting, and higher quality bread;

consequently, consumers often pay a premium of twice as much or more

for branded white pan bread. Competition in the white pan bread market

takes place on two levels, between different brands of

[[Page 40202]]

white breads and between branded and private label white bread.

\1\ The bread is also made by so-called ``captive'' bakers,

i.e., wholesale commercial bakers which are owned by, and bake bread

exclusively for, a grocery chain or wholesale grocery buying

cooperative.

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C. Competition Between Interstate and Continental

Interstate and Continental compete directly in producing,

promoting, and selling both private label and branded white pan bread

to grocery retailers, who in turn sell it to consumers. Interstate's

popular Butternut, Sunbeam, Mrs. Karl's and Weber's regional brands and

Continental's powerhouse national Wonder brand are regarded by

consumers as particularly close substitutes, for they are very

comparable in appearance, price, taste, perceived quality and

freshness.

Interstate and Continental recognize the rivalry between their

products in the relevant geographic markets. To avoid losing sales to

the other, each has engaged in extensive promotional, couponing, and

advertising campaigns that reduce the prices charged for their branded

white pan breads to the benefit of consumers. Through these activities,

Interstate and Continental have each operated as a significant

competitive constraint on the other's prices for white pan bread.

D. Anticompetitive Consequences of the Acquisition

The Complaint alleges that Interstate's acquisition of Continental

would remove the competitive constraint and create (or facilitate

Interstate's exercise of) market power (i.e., the ability to increase

process to consumers) in five relevant geographic markets: the Chicago

area; the Milwaukee area; central Illinois (i.e., Peoria, Springfield,

Champaign/Urbana); the Los Angeles area and the San Diego area.

Specifically, the Complaint alleges that the acquisition would

increase concentration significantly in these already highly

concentrated, difficult-to-enter markets.\2\ Post-acquisition,

Interstate would dominate each market. It would control 41% of all

sales of white pan bread in the Chicago market; 33% in the Milwaukee

market; 62% in the central Illinois market; 64% in the Los Angeles

market; and 50% in the San Diego market.

\2\ The Hirfindahl-Hirschman Index (``HHI'') is a widely-used

measure of market concentration. Following the acquisition, the

approximate post-merger HHIs, calculated from 1994 dollar sales,

would be over: 2250 with a change of 766 for Chicago; 1800 with a

change of 548 for Milwaukee; 4000 with a change of 974 for central

Illinois; 4200 with a change of 2035 for Los Angeles; and 2900 with

a change of 1265 for San Diego. Under the Merger Guidelines, the

Antitrust Division is likely to challenge any acquisition that

increases the HHI by 50 points or more in a market in which the

post-merger HHI will exceed 1800 points.

---------------------------------------------------------------------------

The Complaint alleges that Interstate's acquisition of Continental

would likely lead to an increase in prices charged to consumers for

white pan bread. Following the acquisition, Interstate likely would

unilaterally raise the price of its own brands, Continental's Wonder,

or both. Because Interstate and Continental's brands are perceived by

consumers as close substitutes, Interstate could pursue such a pricing

strategy without losing so much in sales to competing white pan bread

brands or to private labels that the price increase would be

unprofitable. Interstate could, for instance, profitably impose a

significant increase in the price of the Wonder white pan bread, since

a substantial portion of any sales lost for that product would be

recaptured by increased sales of Interstate's other brands. Similarly,

Interstate could increase the prices of any one of its other popular

brands of white pan bread, such as Butternut, and much of the sales

lost by that brand would be picked up by Interstate's Wonder white

bread brand.

Since many consumers consider Interstate and Continental brands to

be closer substitutes than most other branded or private label white

breads, the competitive discipline provided by rivals after the

acquisition would be insufficient to prevent Interstate from

significantly increasing the prices now being charged for Interstate

and Continental branded white pan bread. Moreover, in response to

Interstate's price increases, competing bakers would likely increase

their prices of white pan bread.

The Complaint alleges that new entry by other wholesale commercial

bakers, or brand repositioning by existing competitors, in any of the

five adversely affected geographic markets is unlikely to counteract

these anticompetitive effects.

III. Explanation of the Proposed Final Judgment

The proposed Final Judgment would preserve competition in the sale

of white pan bread in each of the five relevant geographic markets.

Within nine months after entry of the Final Judgment, defendants will

divest certain white pan bread labels, and other assets if necessary,

to make an economically viable competitor in the sale of white pan

bread in each geographic market. It may well be that all that is

required to accomplish this goal is the sale to an existing wholesale

baker of the exclusive rights to make and sell white pan bread under

either Continental or Interstate's most popular brand. Depending on the

purchasers' requirements, however, effective divestiture could also

require a sale of Interstate or Continental's production and

distribution facilities. Defendants must take all reasonable steps

necessary to accomplish the divestitures, and shall cooperate with the

prospective purchaser or with the trustee. If defendants do not

accomplish the ordered divestitures within that nine-month time period,

the Final Judgment provides that the Court will appoint a trustee to

complete the divestitures.

If a trustee is appointed, the proposed Final Judgment provides

that Interstate will pay all costs and expenses of the trustee. The

trustee's commission will be structured so as to provide an incentive

for the trustee based on the price obtained and the speed with which

divestiture is accomplished. After her appointment becomes effective,

the trustee will file monthly reports with the parties and the Court,

setting forth the trustee's efforts to accomplish divestiture. At the

end of six months, if the divestiture has not been accomplished, the

trustee and the parties will make recommendations to the Court, which

shall enter such orders as appropriate.

The relief sought in the various markets alleged in the Complaint

has been tailored to ensure that consumers of white pan bread will not

experience unreasonably high prices as a consequence of the

acquisition.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act (15 U.S.C. Sec. 15) provides that any

person who has been injured as a result of conduct prohibited by the

antitrust laws may bring suit in federal court to recover three times

the damages the person has suffered, as well as costs and reasonable

attorneys' fees. Entry of the proposed Final Judgment will neither

impair nor assist the bringing of any private antitrust damage action.

Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.

16(a)), the proposed Final Judgment has no prima facie effect in any

subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

The United States and the defendants have stipulated that the

proposed Final Judgment may be entered by the Court after compliance

with the provisions of the APPA, provided that the United States has

not withdrawn its consent.

[[Page 40203]]

The APPA conditions entry upon the Court's determination that the

proposed Final Judgment is in the public interest.

The APPA provides a period of at least sixty (60) days preceding

the effective date of the proposed Final Judgment within which any

person may submit to the United States written comments regarding the

proposed Final Judgment. Any person who wishes to comment should do so

within sixty (60) days of the date of publication of this Competitive

Impact Statement in the Federal Register. The United States will

evaluate and respond to the comments. All comments will be given due

consideration by the Department of Justice, which remains free to

withdraw its consent to the proposed Final Judgment at any time prior

to entry. The comments and the response of the United States will be

filed with the Court and published in the Federal Register.

Written comments should be submitted to: Anthony V. Nanni, Chief,

Litigation I Section, Antitrust Division, United States Department of

Justice, 1401 H Street, NW., Suite 4000, Washington, DC 20530. The

proposed Final Judgment provides that the Court retains jurisdiction

over this action, and the parties may apply to the Court for any order

necessary or appropriate for the modification, interpretation, or

enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

The United States considered, as an alternative to the proposed

Final Judgment, a full trial on the merits of its Complaint against

defendants Interstate and Continental. The United States is satisfied,

however, that the divestiture of the assets and other relief contained

in the Final Judgment will establish viable white pan bread competitors

in the geographic markets that would otherwise be adversely affected by

the acquisition. Thus, the Final Judgment would achieve the relief the

government would have obtained through litigation, but avoids the time,

expense and uncertainty of a full trial on the merits of the

government's Complaint.

VII. Standard of Review Under the APPA for Proposed Final Judgment

The APPA requires that proposed consent judgments in antitrust

cases brought by the United States be subject to a sixty-day comment

period, after which the court shall determine whether entry of the

proposed Final Judgment, ``is in the public interest.'' In making that

determination, the court may consider--

(1) the competitive impact of such judgment, including

termination of alleged violations, provisions for enforcement and

modification, duration or relief sought, anticipated effects of

alternative remedies actually considered, and any other

considerations bearing upon the adequacy of such judgment;

(2) the impact of entry of such judgment upon the public

generally and individuals alleging specific injury from the

violations set forth in the complaint including consideration of the

public benefit, if any, to be derived from a determination of the

issues at trial.

15 U.S.C. 16(e) (emphasis added). As the D.C. Circuit recently held,

this statute permits a court to consider, among other things, the

relationship between the remedy secured and the specific allegations

set forth in the government's complaint, whether the decree is

sufficiently clear, whether enforcement mechanisms are sufficient, and

whether the decree may positively harm third parties. See United States

v. Microsoft, 1995-1 Trade Cas. (CCH) p 71,027, at____(Slip op. 26)

(D.C. Cir. June 16,. 1995).

In conducting this inquiry, ``the Court is nowhere compelled to go

to trial or to engage in extended proceedings which might have the

effect of vitiating the benefits of prompt and less costly settlement

through the consent decree process.''\3\ Rather,

\3\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette

Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''

determination can be made properly on the basis of the Competitive

Impact Statement and Response to Comments filed pursuant to the

APPA. Although the APPA authorizes the use of additional procedures,

15 U.S.C. 16(f), those procedures are discretionary. A court need

not invoke any of them unless it believes that the comments have

raised significant issues and that further proceedings would aid the

court in resolving those issues. See H.R. Rep. 93-1463, 93rd Cong.

2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 6535,

6538.

Absent a showing of corrupt failure of the government to

discharge its duty, the Court, in making its public interest

finding, should * * * carefully consider the explanations of the

government in the competitive impact statement and its responses to

comments in order to determine whether those explanations are

---------------------------------------------------------------------------

reasonable under the circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas.

para.61,508, at 71,980 (W.D. Mo. 1977).

Accordingly, with respect to the adequacy of the relief secured by

the decree, a court may not ``engage in an unrestricted evaluation of

what relief would best serve the public.'' United States v. BNS, Inc.,

858 F.2d 456, 462 (9th Cir. 1988) quoting United States v. Bechtel

Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083

(1981); see also Microsoft, 1995-1 Trade Cas. at ____ (Slip. op. 22).

Precedent requires that

The balancing of competing social and political interests

affected by a proposed antitrust consent decree must be left, in the

first instance, to the discretion of the Attorney General. The

court's role in protecting the public interest is one of insuring

that the government has not breached its duty to the public in

consenting to the decree. The court is required to determine not

whether a particular decree is the one that will best serve society,

but whether the settlement is ``within the reaches of the public

interest.'' More elaborate requirements might undermine the

effectiveness of antitrust enforcement by consent decree.\4\

\4\ United States v. Bechtel, 648 F.2d at 666 (citations

omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d

at 463; United States v. National Broadcasting Co., 449 F. Supp.

1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F.

Supp. at 716. See also Microsoft, 1995-1 Trade Cas. at____(Slip op.

23) (whether ``the remedies (obtained in the decree are) so

inconsonant with the allegations charged as to fall outside of the

`reaches of the public interest.' '') (citations omitted).

The proposed Final Judgment, therefore, should not be reviewed

under a standard of whether it is certain to eliminate every

anticompetitive effect of a particular practice or whether it mandates

certainty of free competition in the future. Court approval of a final

judgment requires a standard more flexible and less strict than the

standard required for a finding of liability. ``[A] proposed decree

must be approved even if it falls short of the remedy the court would

impose on its own, as long as it falls within the range of

acceptability or is `within the reaches of public interest.' (citations

omitted).''\5\

\5\ United States v. American Tel. and Tel Co., 552 F. Supp.

131, 150 (D.D.C. 1982), aff'd sub nom. Maryland v. United States,

460 U.S. 1001 (1983) quoting United States v. Gillette Co., supra,

406 F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 605 F.

Supp. 619, 622 (W.D. Ky 1985).

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VIII. Determinative Documents

There are no determinative materials or documents within the

meaning of the APPA that were considered by the United States in

formulating the proposed Final Judgment.

Dated: July 21, 1995.

Respectfully submitted,

Arnold C. Celnicker,

Attorney, Antitrust Division, U.S. Department of Justice.

Certificate of Service

I hereby certify that on July 21, 1995, I caused a copy of the

Competitive Impact Statement filed in U.S. v. Interstate Bakeries

Corporation and Continental Baking Company, Civil No. 95 C 4194, to be

served, by first class

[[Page 40204]]

mail, postage prepaid on counsel for defendants Interstate Bakeries

Corporation and Continental Baking Company, respectively: Terry Grimm,

Winston & Strawn, 35 West Wacker Drive, Chicago, IL 60604; and Donald

Hibner, Sheppard, Mullin, Richter & Hampton, 48th Floor, 333 South Hope

Street, Los Angeles, CA 90071-1448.

Dated: July 21, 1995.

Arnold C. Celnicker,

Attorney, U.S. Department of Justice, Antitrust Division.

[FR Doc. 95-19308 Filed 8-4-95; 8:45 am]

BILLING CODE 4410-01-M