United States vs. American Skiing Company and S-K-I Limited; Proposed Final Judgment and Competitive Impact Statement

DEPARTMENT OF JUSTICE

Antitrust Division

United States vs. American Skiing Company and S-K-I Limited;

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 Judgment,

Stipulation, and Competitive Impact Statement have

[[Page 33766]]

been filed with the United States District Court for the District of

Columbia in United States vs. American Skiing Company and S-K-I

Limited, Civil Action No. 96-1308. The proposed Final Judgment is

subject to approval by the Court after the expiration of the statutory

60-day public comment period and compliance with the Antitrust

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

On June 11, 1996, the United States filed a Complaint seeking to

enjoin a transaction in which American Skiing Company (``ASC'') agreed

to acquire S-K-I Limited (``S-K-I''). ASC and S-K-I are the two largest

owner/operators of ski resorts in New England, and this transaction

would have combined eight of the largest ski resorts in this region.

The Complaint alleged that the proposed acquisition would substantially

lessen competition in providing skiing to eastern New England and Maine

skiers in violation of section 7 of the Clayton Act, 15 U.S.C. 18, and

section 1 of the Sherman Antitrust Act, 15 U.S.C. 1.

The proposed Final Judgment orders defendants to sell all of S-K-

I's rights, titles, and interests in the Waterville Valley resort in

Campton, New Hampshire, and all of ASC's rights, titles, and interests

in the Mt. Cranmore resort in North Conway, New Hampshire, to one or

more purchasers who have the capability to compete effectively in the

provision of skiing to eastern New England and Maine skiers at

Waterville Valley and Mt. Cranmore. The Stipulation also imposes a hold

separate agreement that, in essence, requires the parties to ensure

that, until the divestiture mandated by the Final Judgment has been

accomplished, S-K-I's Waterville Valley and ASC's Mt. Cranmore

operations will be held separate and apart from, and operated

independently of, ASC's assets and businesses. A Competitive Impact

Statement filed by the United States describes the Complaint, the

proposed Final Judgment, and remedies available to private litigants.

Public comment is invited within the statutory 60-day comment

period. Such comments, and the responses thereto, will be published in

the Federal Register and filed with the Court. Written comments should

be directed to Craig W. Conrath, Chief, Merger Task Force, Antitrust

Division, 1401 H Street, N.W., Suite 4000, Washington, D.C. 20530

(telephone: 202-307-5779). Copies of the Complaint, proposed Final

Judgment and Competitive Impact Statement are available for inspection

in Room 3233 of the Antitrust Division, Department of Justice, Tenth

Street and Pennsylvania Avenue, N.W., Washington, D.C. 20530

(telephone: 202-633-2481) and at the Office of the Clerk of the United

States District Court for the District of Columbia, Third Street and

Constitution Avenue, N.W., Washington, D.C. 20001.

Copies of any of these materials may be obtained upon request and

payment of a copying fee.

Constance K. Robinson,

Director of Operations, Antitrust Division.

In the matter of: UNITED STATES OF AMERICA, Plaintiff, vs.

AMERICAN SKIING COMPANY, and S-K-I Limited, Defendants.

Docket Number: 96 1308

Judge: Thomas Penfield Jackson.

Filed: June 11, 1996.

Stipulation

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

respective attorneys, as follows:

(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 District for the District of Columbia.

(2) The parties stipulate 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), 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 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 of the proposed Final Judgment as though the

same were in full force and effect as an order of the Court; provided,

however, that S-K-I Limited shall not be obligated to comply with

Sections IV (A) or IX (A) of the Final Judgment unless and until the

closing of any transaction in which American Skiing Company (formerly

LBO Resort Enterprises) directly or indirectly acquires all or any part

of the assets or capital stock of S-K-I Limited; provided, further,

that S-K-I Limited shall not be obligated to comply with Sections IX

(B) through (J) of the Final Judgment in the event that the

Transactions contemplated by the Agreement and Plan of Merger, between

LBO Resort Enterprises Corporation and S-K-I Limited, date February 13,

1996, are terminated.

(4) American Skiing Company shall prepare and deliver reports in

the form required by the provisions of paragraph B of Section VII of

the proposed Final Judgment commencing no later than July 1, 1996, and

every thirty days thereafter pending entry of the Final Judgment.

(5) In the event plaintiff withdraws its consent, as provided in

paragraph 2 above, 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.

(6) All parties agree that this agreement can be signed in multiple

counter-parts.

Dated: June 11, 1996.

For Plaintiff United States of America:

Craig W. Conrath,

U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401

H Street, N.W.; Suite 4000, Washington, D.C. 20005, (202) 307-5779.

For Defendant American Skiing Company:

Jeffrey M. White,

Pierce, Atwood, Scribner, Allen, Smith & Lancaster, One Monument

Square, Portland, Maine 04101-1110, (207) 773-6411, Attorney for

American Skiing Co.

For Defendant S-K-I Limited

Paul D. Sanson,

Shipman & Goodwin, One American Row, Hartford, CT 06103-2819, (860)

251-5721, Attorney for S-K-I Limited.

Dated: June 10, 1996.

For Plaintiff United States of America:

Craig W. Conrath,

U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401

H Street, N.W.; Suite 4000, Washington, D.C. 20005, (202) 307-5779.

For Defendant American Skiing Company:

Jeffrey M. White,

Pierce, Atwood, Scribner, Allen, Smith & Lancaster, One Monument

Square, Portland, Maine (207) 773-6411, Attorney for American Skiing

Co.

For Defendant S-K-I Limited:

Paul D. Sanson,

Shipman & Goodwin, One American Row, Hartford, CT 06103-2819, (860)

251-5721, Attorney for S-K-I Limited.

Dated: June 11, 1996.

[[Page 33767]]

For Plaintiff United States of America:

Craig W. Conrath,

Antitrust Division, Merger Task Force, 1401 H Street, N.W.; Suite 4000,

Washington, D.C. 20005, (202) 307-5779.

For Defendant American Skiing Company:

Jeffrey M. White,

Pierce, Atwood, Scribner, Allen, Smith & Lancaster, One Monument

Square, Portland, Maine 04101-1110, (207) 773-6411, Attorneys for

American Skiing Co.

For Defendant S-K-I Limited:

Paul D. Sanson,

Shipman & Goodwin, One American Row, Hartford, CT 06103-2819, (860)

251-5721, Attorney for S-K-I Limited.

In the matter of: UNITED STATES OF AMERICA, Plaintiff, v.

AMERICAN SKIING COMPANY, and S-K-I LIMITED, Defendants.

Civil No.: 96 1308. Filed 6/11/96. Judge Thomas Penfield

Jackson.

Final Judgment

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

Complaint herein on June , 1996, 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, the essence of this Final Judgment is prompt and

certain divestiture of assets to assure that competition is not

substantially lessened;

And whereas, plaintiff requires defendants to make certain

divestitures for the purpose of remedying the loss of competition

alleged in the Complaint;

And whereas, defendants have represented to plaintiff that the

divestitures ordered herein can and will be made and that defendants

will later raise no claims of hardship or difficulty as grounds 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 defendant under Section 7 of the Clayton

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

II. Definitions

As used in this Final Judgment:

A. ``ASC'' means defendant American Skiing Company (formerly known

as LBO Resort Enterprises Corporation), a Maine corporation

headquartered in Newry, Maine, and includes its successors and assigns,

and its subsidiaries, directors, officers, managers, agents, and

employees acting for or on behalf of any of them.

B. ``S-K-I'' means defendant S-K-I Limited, a Delaware corporation

headquartered in West Lebanon, New Hampshire, and includes its

successors and assigns, and its subsidiaries, directors, officers,

managers, agents, and employees acting for or on behalf of any of them.

C. ``Divestiture Assets'' means:

(1) all rights, titles and interests, including all fee and all

leasehold and renewal rights, in S-K-I's Waterville Valley resort in

Campton, New Hampshire, including, but not limited to, all real

property (including but not limited to property owned in fee or through

a lease or special use permit from the United States Forest Service),

deeded development rights to real property, capital equipment

(including but not limited to lifts and snowmaking equipment),

buildings, fixtures, inventories, contracts (including but not limited

to customer contracts), customer lists, marketing or consumer surveys

relating to Waterville Valley, permits (including but not limited to

environmental permits and all permits from the United States Forest

Service), all work in progress on permits or studies undertaken in

order to obtain permits, plans for design or redesign of ski trails,

trucks and other vehicles, interests, assets or improvements related to

the provision of skiing services to customers at the Waterville Valley

resort (collectively ``Waterville Valley''); and

(2) all rights, titles and interests, including all fee and all

leasehold and renewal rights, in ASC's Mt. Cranmore resort in North

Conway, New Hampshire, including, but not limited to, all real property

(including but not limited to property owned in fee or through a lease

or special use permit from the United States Forest Service), deeded

development rights to real property, capital equipment (including, but

not limited to, lifts and snowmaking equipment), buildings, fixtures,

inventories, contracts (including, but not limited to, customer

contracts), customer lists, marketing or consumer surveys relating to

Mt. Cranmore, permits (including, but not limited to, environmental

permits and all permits from the National Forest Service), all work in

progress on permits or studies undertaken in order to obtain permits,

plans for design or redesign of ski trails, trucks and other vehicles,

interests, assets or improvements related to the provision of skiing

services to customers at the Mt. Cranmore resort; (collectively ``Mt.

Cranmore''); provided, however that Mt. Cranmore shall not include the

81.9 acres of real estate identified in the subdivision application

filed by Mt. Cranmore, Inc. with the town of North Conway, New

Hampshire, unless plaintiff, in its sole discretion, determines that

such 81.9 acres must be divested for the purchaser of Mt. Cranmore to

satisfy the criteria set forth in Section IV (G) of the Final Judgment.

D. ``Skiing services'' means all services related to providing

access to downhill skiing and snowboarding, including, but not limited

to, providing lifts, skiing lessons, ski patrol, snowmaking, design,

building, and grooming of trails, and ancillary services such as food

service, entertainment, and lodging.

III. Applicability

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

successors and assigns, 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 Divestiture Assets, that

the purchaser or purchasers agree to be bound by the provisions of this

Final Judgment.

IV. Divestitures

A. Defendants are hereby ordered and directed, in accordance with

the terms of this Final Judgment, within one hundred and eighty (180)

calendar days after the filing of this Final Judgment, to divest the

Divestiture Assets to a purchaser or purchasers.

B. Divestiture of defendants' leasehold interests, if any, in the

Divestiture Assets shall be by transfer of the entire leasehold

interest, which shall be for the entire remaining term of such

leasehold, including any renewal rights.

C. Defendants agree to use their best efforts to accomplish the

divestitures as expeditiously and timely as possible. Plaintiff, in its

sole discretion, may extend the time period for any divestiture for two

additional periods of

[[Page 33768]]

time not to exceed ninety (90) calendar days in toto.

D. In accomplishing the divestitures ordered by this Final

Judgment, defendants promptly shall make known, by usual and customary

means, the availability of the Divestiture Assets. Defendant shall

inform any person making an inquiry regarding a possible purchase that

the sale is being made pursuant to this Final Judgment and provide such

person with a copy of this Final Judgment. Defendants shall make known

to any person making an inquiry regarding a possible purchase of the

Divestiture Assets that the assets described in Section II (C) are

being offered for sale and that Waterville Valley and Mt. Cranmore may

be purchased as a two resort package or sold separately to different

purchasers. Defendants shall also offer to furnish to all bona fide

prospective purchasers, subject to customary confidentiality

assurances, all information regarding the Divestiture Assets

customarily provided in a due diligence process except such information

subject to attorney-client privilege or attorney work-product

privilege. Defendants shall make available such information to

plaintiff at the same time that such information is made available to

any other person.

E. Defendants shall not interfere with any negotiations by any

purchaser or purchasers to employ any employee of the defendants who

works at Waterville Valley or Mt. Cranmore, or whose employment

substantially relates to the provision of skiing services at Waterville

Valley or Mt. Cranmore, or whose responsibilities include the

management of or marketing for Waterville Valley or Mt. Cranmore.

F. Defendants shall permit prospective purchasers of the

Divestiture Assets to have access to personnel and to make such

inspection of the Divestiture Assets, and any and all financial,

operational, or other documents and information customarily provided as

part of a due diligence process.

G. Unless plaintiff otherwise consents in writing, the divestiture

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

Section V of this Final Judgment, shall include all of the Divestiture

Assets and be accomplished by selling or otherwise conveying the assets

described in Section II (B) to one or two purchasers (or, as provided

in Section IV (H) with respect to Mt. Cranmore, several purchasers), in

such a way as to satisfy plaintiff, in its sole discretion, that the

Divestiture Assets can and will be used by the purchaser or purchasers

as part of a viable, ongoing business or businesses engaged in the

provision of skiing services at Waterville Valley and Mt. Cranmore. The

divestiture, whether pursuant to Section IV or Section V of this Final

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

demonstrated to plaintiff's sole satisfaction that: (1) the purchaser

or purchasers have the capability and intent of competing effectively

in the provision of skiing services at Waterville Valley and Mt.

Cranmore; (2) the purchaser or purchasers have or soon will have the

managerial, operational, and financial capability to compete

effectively in the provision of skiing services at Waterville Valley

and Mt. Cranmore; and (3) none of the terms of any agreement between

the purchaser or purchasers and defendants give defendants the ability

unreasonably to raise the purchaser's or purchasers' costs, to lower

the purchaser's or purchasers' efficiency, or otherwise to interfere in

the ability of the purchaser and purchasers to compete effectively in

the provision of skiing services at Waterville Valley and Mt. Cranmore.

H. Defendants may divest the Mt. Cranmore sports center, the Mt.

Cranmore tennis stadium and the development rights to land owned by the

Nature Conservancy (which land is adjacent to Mt. Cranmore) to separate

purchasers, provided that plaintiff, in its sole discretion, first

determines that the purchaser of the remaining assets of Mt. Cranmore

satisfies the criteria set forth in Section IV(G) of the Final

Judgment.

V. Appointment of Trustee

A. In the event that defendants have not divested the Divestiture

Assets within the time specified in Sections IV (A) or (C) of this

Final Judgment, the Court shall appoint, on application of the United

States, a trustee selected by the United States to effect the

divestiture of the Divestiture Assets.

B. After the appointment of a trustee becomes effective, only the

trustee shall have the right to sell the Divestiture Assets. The

trustee shall have the power and authority to accomplish the

divestiture at the best price then obtainable upon a reasonable effort

by the trustee, subject to the provisions of Sections V and VI of this

Final Judgment, and shall have such other powers as the Court shall

deem appropriate. Subject to Section V(C) of this Final Judgment, the

trustee shall have the power and authority to hire at the cost and

expense of defendants any investment bankers, attorneys, or other

agents reasonably necessary in the judgment of the trustee to assist in

the divestiture, and such professionals and agents shall be accountable

solely to the trustee. The trustee shall have the power and authority

to accomplish the divestiture at the earliest possible time to a

purchaser or purchasers acceptable to plaintiff, and shall have such

other powers as this Court shall deem appropriate. Defendants shall not

object to a sale by the trustee on any grounds other than the trustee's

malfeasance. Any such objections by defendant must be conveyed in

writing to plaintiff and the trustee within ten (10) calendar days

after the trustee has provided the notice required under Section VI of

this Final Judgment.

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

on such terms and conditions as the Court may prescribe, and shall

account for all monies derived from the sale of the assets sold by the

trustee and all costs and expenses so incurred. After approval by the

Court of the trustee's accounting, including fees for its services and

those of any professionals and agents retained by the trustee, all

remaining money shall be paid to ASC and the trust shall then be

terminated. The compensation of such trustee and of any professionals

and agents retained by the trustee shall be reasonable in light of the

value of the Divestiture Assets and based on a fee arrangement

providing the trustee with an incentive based on the price and terms of

the divestiture and the speed with which it is accomplished.

D. Defendants shall use their best efforts to assist the trustee in

accomplishing the required divestiture. The trustee and any

consultants, accountants, attorneys, and other persons retained by the

trustee shall have full and complete access to the personnel, books,

records, and facilities of defendants, and defendants shall develop

financial or other information relevant to such assets as the trustee

may reasonably request, subject to reasonable protection for trade

secret or other confidential research, development, or commercial

information. Defendants shall take no action to interfere with or to

impede the trustee's accomplishment of the divestiture.

E. After its appointment, the trustee shall file monthly reports

with the parties and the Court setting forth the trustee's efforts to

accomplish the divestiture ordered under this Final Judgment. If the

trustee has not accomplished such divestiture within six (6) months

after its appointment, the trustee thereupon shall file promptly with

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

accomplish the required divestiture, (2) the reasons, in

[[Page 33769]]

the trustee's judgment, that 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

report 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 enter thereafter such orders as it shall deem

appropriate in order to carry out the purpose of the trust, which may,

if necessary, include extending the trust and the term of the trustee's

appointment by a period requested by the United States.

VI. Notification

Within two (2) business days following execution of a definitive

agreement, 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 a desire to, acquire any

ownership interest in the assets that are 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 from defendants, the proposed purchaser or purchasers, any

other third party, or the trustee if applicable additional information

concerning the proposed divestiture and the proposed purchaser or

purchasers. Defendants and the trustee shall furnish any additional

information requested within fifteen (15) 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 from defendants, the proposed purchaser or

purchasers, any third party, and 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 Section V(B) of this Final Judgment. Absent written notice

that plaintiff does not object to the proposed purchaser or 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(B), a divestiture proposed under Section V

shall not be consummated unless approved by the Court.

VII. Affidavits

A. Within twenty (20) calendar days of the filing of this Final

Judgment and every thirty (30) calendar days therafter until the

divestitures have been completed whether pursuant to Section IV or

Section V of this Final Judgment, ASC shall deliver to plaintiff an

affidavit as to the fact and manner of defendants' compliance with

Sections IV or V of this Final Judgment. Each such affidavit shall

include, inter alia, 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 Divestiture Assets, and

shall describe in detail each contact with any such person during that

period.

B. Within twenty (20) calendar days of the filing of this Final

Judgment, ASC shall deliver to plaintiff an affidavit which describes

in detail all actions defendants have taken and all steps defendants

have implemented on an on-going basis to preserve the Divestiture

Assets pursuant to Section IX of this Final Judgment and describes the

functions, duties and actions taken by or undertaken at the supervision

of the individual(s) described at Section IX(F) of this Final Judgment

with respect to defendants' efforts to preserve the Divestiture Assets.

The affidavit also shall describe, but not be limited to, defendants'

efforts to maintain and operate Waterville Valley and Mt. Cranmore as

active competitors, maintain the management, sales, marketing and

pricing of Waterville Valley and of Mt. Cranmore apart from that of

defendants' other businesses that provide skiing services, maintain and

increase sales of skiing services at Waterville Valley and at Mt.

Cranmore, and maintain the Divestiture Assets in operable condition,

continuing normal maintenance. ASC shall deliver to plaintiff an

affidavit describing any changes to the efforts and actions outlined in

defendants' earlier affidavit(s) filed pursuant to this Section within

fifteen (15) calendar days after the change is implemented.

C. Defendants shall preserve all records of all efforts made to

preserve and divest the Divestiture Assets.

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:

A. Defendants shall take all steps necessary to ensure that the

Divestiture Assets will be maintained and operated as independent,

ongoing, economically viable and active competitors in the provision of

skiing services; and that, except as necessary to comply with Sections

IX(B) to IX(F) of this Final Judgment, the management of the

Divestiture Assets shall be kept separate and apart from the management

of defendants' other ski resorts and will not be influenced by

defendants and the books, records, and competitively sensitive sales,

marketing and pricing information associated with the Divestiture

Assets will be kept separate and apart from that of defendants; other

businesses that provide skiing services.

B. Defendants shall use all reasonable efforts to maintain and

increase sales of skiing services a Waterville Valley and at Mt.

Cranmore, and defendants shall maintain at 1995 or previously approved

levels, whichever are higher, promotional, advertising, sales,

marketing and merchandising support for skiing services sold at

Waterville Valley and at Mt. Cranmore. Defendants' sales and marketing

employees responsible for sales of skiing services at Waterville Valley

and at Mt. Cranmore shall not be transferred or reassigned to other ski

resorts owned by defendant.

C. Defendants shall take all steps necessary to ensure that the

Divestiture Assets are fully maintained in operable condition and shall

maintain and adhere to normal maintenance schedules for the Divestiture

Assets.

D. Defendants shall continue all efforts in progress to obtain

permits for either Waterville Valley or Mt. Cranmore, including, but

not limited to, efforts to obtain permits that will allow the building

of ponds for the storage of water for snowmaking, provided that

defendants will not be required to add any of the permitted ponds.

E. Defendants shall provide and maintain sufficient lines of

sources of

[[Page 33770]]

credit to maintain the Divestiture Assets as viable, ongoing

businesses.

F. Defendants shall provide and maintain sufficient working capital

to maintain the Divestiture Assets as viable ongoing businesses.

G. Defendants shall not, except as part of a divestiture approved

by plaintiff, remove, sell, or transfer any of the Divestiture Assets,

other than sales in the ordinary course of business.

H. Unless they have obtained the prior approval of the United

States, defendants shall refrain from terminating or reducing any

current employment, salary, or benefit agreements for any personnel

employed by defendants who works at Waterville Valley or Mt. Cranmore,

except in the ordinary course of business.

I. Defendants shall take no action that would jeopardize their

ability to divest the Divestiture Assets as viable, ongoing businesses.

J. Defendants shall appoint a person or persons to oversee the

Divestiture Assets, and who will be responsible for defendant's

compliance with Section IX of this Final Judgment.

X. Compliance Inspection

Only for the purposes 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 United States 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 their principal offices, 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

defendant, 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 it, to interview its officers,

employees, and agents, 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 offices, 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

Section X of this Final Judgment shall be divulged by a representative

of plaintiff 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 securing compliance with

the 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 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 of its entry.

XIII. Public Interest

Entry of this Final Judgment is in the public interest.

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

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United States District Judge

UNITED STATES OF AMERICA, PLAINTIFF, versus AMERICAN SKIING

COMPANY, and S-K-I LIMITED, Defendants.

Civil Action No.: 96-01308TPJ.

Filed: June 18, 1996.

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 June 11,

1996, alleging that American Skiing Company's (``ASC'') proposed

acquisition of the ski resorts of S-K-I Limited (``S-K-I'') would

violate section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The Complaint

alleges that ASC and S-K-I are the two largest owner/operators of ski

resorts in New England, and that this transaction would combine eight

of the largest ski resorts in this region. In particular, this

acquisition would increase substantially the concentration among ski

resorts to which eastern New England residents (i.e., those in Maine,

eastern Massachusetts and Connecticut, and Rhode Island) practicably

can go for weekend ski trips, and to which Maine residents practicably

can go for day ski trips. As a result, this acquisition threatens to

raise the price of, or reduce discounts for, weekend and day skiing to

consumers living in these areas in violation of section 7 of the

Clayton Act. The prayer for relief in the Complaint seeks: (1) a

judgment that the proposed acquisition would violate section 7 of the

Clayton Act, 15 U.S.C. 18; and (2) a permanent injunction preventing

ASC from acquiring control of S-K-I's ski resorts, or otherwise

combining such businesses with ASC's own business in the United States.

At the same time the Complaint was filed, the United States also

filed a proposed settlement that would permit ASC to complete its

acquisition of S-K-I's ski resorts, but require certain divestitures

that would preserve competition for skiers in eastern New England and

Maine. This settlement consists of a Stipulation and a proposed Final

Judgment.

The proposed Final Judgment orders the parties to sell all of S-K-

I's rights, titles, and interests in the Waterville Valley resort in

Campton, New Hampshire, and all of ASC's rights, titles, and interests

in the Mt. Cranmore resort in North Conway, New Hampshire, to one or

more purchasers who have the capability to compete effectively in the

provision of skiing for skiers in eastern New England and Maine at

Waterville Valley and Mt. Cranmore. The parties must complete the

divestiture of these ski resorts and related assets within one hundred

and eighty (180) calendar days after the filing of the proposed Final

Judgment in accordance with the procedures specified therein.

The Stipulation and proposed Final Judgment also impose a hold

separate agreement that requires defendants to ensure that, until the

divestiture

[[Page 33771]]

mandated by the Final Judgment has been accomplished, S-K-I's

Waterville Valley and ASC's Mt. Cranmore operations will be held

separate and apart from, and operated independently of, defendants'

other assets and businesses. Defendants must preserve and maintain the

ski resorts to be divested as saleable and economically viable, ongoing

concerns, with competitively sensitive business information and

decisionmaking divorced from that of defendants' ski resorts.

Defendants will appoint a person or persons to monitor and ensure their

compliance with these requirements of the proposed Final Judgment.

The United States, ASC, and S-K-I have stipulated that the proposed

Final Judgment may be entered after compliance with the APPA. Entry of

the proposed Final Judgment may be entered after compliance with the

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

except that 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 Parties and the Proposed Transaction

ASC, A Maine corporation headquartered in Newry, Maine, owns four

ski resorts: Sunday River in Main, Attitash/Bear Peak and Mt. Cranmore

in New Hampshire, and Sugarbush in Vermont. During the 1994-95 ski

season, ASC resorts accounted for 1.1 million skier days. ASC had

revenues of over $58 million in 1995.

S-K-I, a Delaware corporation headquartered in West Lebanon, New

Hampshire, also owns four ski resorts: Killington and Mt. Snow/Haystack

in Vermont, Waterville Valley in New Hampshire, and a 51 percent

interest in Sugarloaf in Maine. During the 1994-95 ski season, S-K-I

resorts accounted for 1.8 million skier days. S-K-I had revenues of

more than $109 million in 1995.

On February 13, 1996, ASC agreed to acquire all the common stock of

S-K-I for approximately $137 million, which includes the assumption of

certain liabilities. Pursuant to the purchase agreement, ASC would

acquire all of the ski resort services and operations of S-K-I and its

subsidiaries as well as its 51 percent interest in Sugarloaf. This

proposed transaction combining the two largest owner/operators of ski

resorts in New England precipitated the government's suit.

B. The Skiing Market

The Complaint alleges that the provision of weekend and day skiing

constitutes a line of commerce, or relevant product market, for

antitrust purpose, and that eastern New England and Maine constitute

relevant geographic markets. Within eastern New England and Maine, the

Complaint alleges the effect of ACS's acquisition would be to lessen

competition substantially in the provision of skiing.

The business of skiing comprises all services related to providing

access to downhill skiing and snowboarding, including, but not limited

to, providing lifts, ski patrol, snowmaking, design, building, and

grooming of trails, skiing lessons, and ancillary services such as food

service, entertainment, and lodging.

Most skiers must travel some distance from their homes to ski.

Consequently, depending on, among other things, the duration of a given

ski trip, the number of resorts practicably available to a skier will

vary according to the time and expense required to travel to, and the

qualitative aspects of, the possible alternatives.

The duration of a ski trip and the distance traveled by the skier

can be identified easily by ski resorts. As a consequence, ski resorts

can and do offer different prices to skiers depending on where they

come from and how long they plan to stay at the resort. For example,

consecutive-day passes can be offered at discount off the single day

ticket to attract weekend skiers. Discounts can be given to a skier who

presents a drives license from a more distant state without the same

discounts being offered to local residents, who may have fewer choices.

Also, coupons can be put in local papers or sent out by direct mail,

targeted to skiers in particular geographic areas. Promotions can be

targeted to skiers in defined locations without significant risk that

skiers in other locations will be able to learn about and take

advantage of the lower price being offered to others. In addition, ski

resorts routinely offer discounts on lift ticket prices when tickets

are packaged with lodging, either by offering such ``ski and stay''

packages directly to skiers or by selling discounted lift tickets to

the owner of a hotel or inn, who in turn sells a package to skiers. As

a result, ski resorts can and do routinely charge different prices for

skiing depending on the length of stay and the residence of the skier.

Downhill skiing differs from other winter recreational activities, such

as cross-country skiing, ice skating, snow-mobiling, sleigh rides,

tobagganing, ice fishing,and taking cruises to places with hot

climates. small but significant and nontransitory increase in prices

for skiing would not cause a significant number of downhill skiers to

substitute other winter recreational activities for skiing.

Moreover, geographic markets for skiing are regional. Skiers are

not willing to travel an unlimited distance to ski. Traveling to

distant ski resorts imposes a burden on the skier, either in the form

of excessive driving time or of a large additional expense for airfare.

However, the longer the ski trip, the greater a skier's willingness to

travel. Thus, distance a skier will travel to a ski resort depends in

part on the length of time that skier will stay at the resort and on

the qualitative characteristics of the resort.

C. Competition Between ASC and S-K-I

ASC and S-K-I compete directly to provide skiing to both eastern

New England weekend skiers and Maine day skiers.

Eastern New England Weekend Skiers

ASC and S-K-I both provide skiing to eastern New England weekend

skiers at each of their ski resorts. Eastern New England residents can

practicably turn only to a limited number of resorts with adequate

services (e.g., accommodations, number and variety of trails, and other

amenities) in Maine, New Hampshire, and Vermont for weekend skiing

trips. These are the resorts that have the necessary qualities and are

within a reasonable traveling distance for eastern New England weekend

skiers.

Smaller ski resorts and resorts located farther away cannot and

after this transaction would not constrain prices charged to weekend

skiers living in eastern New England. Although eastern New England

skiers occasionally choose to ski at such smaller or more distance

resorts, skiing at such resorts is not a practical or economic

alternative for most eastern New England weekend skiers most of the

time.

Ski resorts in Maine, New Hampshire, and Vermont that have the

necessary qualities and services to attract weekend skiers from eastern

New England can charge different prices to these skiers than they

charge to others. Eastern New England weekend skiers can be identified

easily by the ski resorts that are reasonable alternatives for these

consumers. These ski resorts can charge eastern New England weekend

skiers prices that differ from prices charged to

[[Page 33772]]

day skiing customers, to customers coming from other parts of the

country, or to customers who stay longer than a weekend. Ski resorts

can offer coupons for discounted lift tickets packaged with lodging

and/or airfare, either through direct mail or through advertising in

local papers, in, for example, the New York, Washington D.C., or

Atlanta metropolitan areas, and not offer such coupons in eastern New

England. A single firm controlling all the resorts in Maine, New

Hampshire, and Vermont with adequate services for weekend skiing would

be able to raise prices a small but significant amount to eastern New

England weekend skiers without losing so much business as to make the

price increase unprofitable.

Thus, the provision of weekend skiing to eastern New England

residents is a relevant market (i.e., a line of commerce and a section

of the country) within the meaning of Section 7 of the Clayton Act, and

ASC and S-K-I compete directly in this market.

Maine Day Skiers

ASC provides skiing to Maine day skiers primarily at its Sunday

River, Attitash/Bear Peak, and Mt. Cranmore ski resorts. S-K-I provide

skiing to Maine day skiers primarily at its Sugarloaf and Waterville

Valley ski resorts. Maine residents can practicably turn only to

resorts in Maine and eastern New Hampshire for day skiing trips. These

are the resorts that are within a reasonable traveling distance for

Maine day skiers.

Ski resorts located father from Maine cannot and after this

transaction would not constrain prices charged to day skiers living in

Maine. Although Maine skiers occasionally choose to ski at such more

distant resorts, skiing at such resorts is not a practical or economic

alternative for most Maine day skiers most of the time.

Ski resorts in Maine and eastern New Hampshire can charge prices to

Maine day skiers different from prices they charge to other skiers.

Maine day skiers can be identified easily by the ski resorts that are

reasonable alternatives for these consumers. These ski resorts can

charge Maine day skiers prices that differ from prices charged to out-

of-state skiers or to Maine skiers who stay multiple days. A single

firm controlling all the ski resorts in Maine and eastern New Hampshire

would be able to raise prices a small but significant amount to Maine

day skiers without losing so much business as to make the price

increase unprofitable.

Thus, the provision of day skiing to Maine residents is a relevant

market (i.e., a line of commerce and a section of the country) within

the meaning of section 7 of the Clayton Act, and ASC and S-K-I compete

directly in this market.

D. Anticompetitive Consequences of the Acquisition

The Complaint alleges that the acquisition of S-K-I by ASC would

substantially lessen competition. The transaction would have the

following effects, among others:

1. Competition generally in providing skiing to eastern New

England weekend skiers would be lessened substantially;

2. Actual competition between ASC and S-K-I in providing skiing

to eastern New England weekend skiers would be eliminated;

3. Discounting to eastern New England weekend skiers by ASC and

S-K-I resorts would likely be reduced or eliminated;

4. Prices for skiing to eastern New England weekend skiers would

be likely to increase;

5. Competition generally in providing skiing to Maine day skiers

would be lessened substantially;

6. Actual competition between ASC and S-K-I in providing skiing

to Maine day skiers would be eliminated;

7. Discounting to Maine day skiers by ASC and S-K-I resorts

would likely be reduced or eliminated; and,

8. Prices for skiing to Maine day skiers would be likely to

increase.

Moreover, the Complaint alleges that the combination of ASC and S-

K-I would substantially increase concentration in the eastern New

England weekend skier market and Maine day skier market using the

Herfindahl-Hirschman Index (``HHI'') (explained in Appendix A to the

Complaint) as a measure of market concentration. The approximate post-

merger HHI for eastern New England weekend skiing, based on the 1994-95

total skier days of ski resorts located in Maine, New Hampshire, and

Vermont capable of attracting and accommodating weekend skiers, would

be approximately 2100 with a change in HHI of about 900 points. The

approximate post-merger HHI for Maine day skiing, based on the 1994-95

total skier days of ski resorts located in Maine and eastern New

Hampshire, would be over 2900 with a change in HHI of over 1200 points.

Finally, the Complaint alleges that successful entry or expansion

in the skiing business would be difficult, time consuming, and costly,

as well as extremely unlikely. Entry or expansion therefore would not

be timely, likely, or sufficient to prevent any harm to competition.

III. Explanation of the Proposed Final Judgment

The proposed Final Judgment would preserve competition for skiers

in the operation of ski resorts in eastern New England and Maine.

Within one hundred and eighty (180) calendar days after filing the

proposed Final Judgment, defendants must sell all of S-K-I's rights,

titles, and interests in the Waterville Valley resort in Campton, New

Hampshire, and all of ASC's rights, titles, and interests in the Mt.

Cranmore resort in North Conway, New Hampshire, to one or more

purchasers. The assets and interests will be sold to one or more

purchasers who demonstrate to the sole satisfaction of the United

States that they will be an economically viable and effective

competitor, capable of maintaining or surpassing ASC's and S-K-I's pre-

acquisition market performance in the operation of ski resorts in the

New England region.

The divestitures ordered in the proposed Final Judgment will

resolve the anticompetitive problems raised by the proposed

transaction. With these divestitures, the post-merger HHI for the

eastern New England weekend skiing market will be below 1800, and the

parties' post-merger share of that market will be less than 40 percent.

The post-merger HHI for the Maine day skiing market will be slightly

over 1900 with these divestitures, and the parties' post-merger share

of that market will be less than 35 percent. Given these post-

divestiture HHI levels, the combined firm's post-divestiture market

shares, and the number and size of independent ski resorts remaining in

the affected markets, the proposed transaction is not likely to lead to

a unilateral anticompetitive effect or to a higher probability of

coordinative behavior, provided the divestitures are made.

Until the ordered divestitures take place, defendants must take all

reasonable steps necessary to accomplish the divestitures, and

cooperate with any prospective purchaser. If defendants do not

accomplish the ordered divestiture within the specified one hundred and

eighty (180) calendar day time period, which may be extended up to

ninety (90) calendar days by the United States, the proposed Final

Judgment provides for procedures by which the Court shall appoint a

trustee to complete the divestitures. In that case defendants must

cooperate fully with the trustee.

If a trustee is appointed, the proposed Final Judgment provides

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

trustee's

[[Page 33773]]

compensation will be structured so as to provide an incentive for the

trustee to obtain the highest price for the assets to be divested, and

to accomplish the divestiture as quickly as possible. After the

effective date of his or her appointment, the trustee shall serve under

such other conditions as the Court may prescribe. After his or her

appointment becomes effective, the trustee will file monthly reports

with the parties and the Court, setting forth the trustee's efforts to

accomplish the divestiture. At the end of six (6) months, if the

divestiture has not been accomplished, the trustee shall file promptly

with the Court a report that sets forth: (1) The trustee's efforts to

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

why the divestiture has not been accomplished, and (3) the trustee's

recommendations. The trustee's report will be furnished to the parties

and shall be filed in the public docket, except to the extent the

report contains information the trustee deems confidential. The parties

each will have the right to make additional recommendations to the

Court. The Court shall enter such orders as it deems appropriate to

carry out the purpose of the trust.

The proposed Final Judgment also imposes a hold separate agreement

that requires defendants to ensure that, until the divestiture mandated

by the Final Judgment has been accomplished, S-K-I's Waterville Valley

and ASC's Mt. Cranmore operations will be held separate and apart from,

and operated independently of, defendants' other assets and businesses.

IV. Remedies Available to Potential Private Litigants

Section 4 of the Clayton Act, 15 U.S.C. 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

attorney's 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 ASC or S-K-I.

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. 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: Craig W. Conrath, Chief,

Merger Task Force, Antitrust Division, United States Department of

Justice, 1401 H Street, N.W., Suite 4000, Washington, D.C. 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 ASC

and against S-K-I. The United States is satisfied, however, that the

divestitute of the assets and other relief contained in the proposed

Final Judgment will preserve viable competition in the operation of ski

resorts that otherwise would be affected adversely by the acquisition.

Thus, the proposed 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 (60) 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 United States Court of Appeals

for 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, 56 F.3d

1448, 1461-62 (D.C. Cir. 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.'' \1\ Rather,

\1\ 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.

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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., 1997-1 Trade Gas. 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

[[Page 33774]]

Cir.), cert. denied, 454 U.S. 1083 (1981); see also Microsoft, 56 F.3d

at 1460-62. 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.\2\

\2\ 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, 56 F.3d at 1461 (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).

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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).'' \3\

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\3\ 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.

Respectfully submitted,

Burney P.C. Huber,

Attorney, D.C. Bar #181818, Dept. of Justice, Antitrust Division, 1401

H Street, NW., Suite 4000, Washington, DC 20530, (202) 307-1858.

June 18, 1996.

[FR Doc. 96-16497 Filed 6-27-96; 8:45 am]

BILLING CODE 4410-01-M