SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 10, 1999
Brunswick Corporation
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(Exact Name of Registrant as Specific in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-1043 36-0848180
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(Commission File Number) (I.R.S. Employer Identification No.)
1 North Field Court, Lake Forest, Illinois 60045-4811
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(Address of Principal Executive Offices) (Zip Code)
(847) 735-4700
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
Two additional lawsuits were brought against Brunswick in February
1999 claiming Brunswick violated various provisions of federal or state
antitrust and consumer protection laws in connection with its sales of
MerCruiser sterndrive and inboard engines and seeking to rely on the
liability findings of Concord Boat Corporation, et al. v. Brunswick
Corporation (Concord). Brunswick's press releases announcing the filing of
these lawsuits are exhibits to this current report.
The first of these additional suits was brought on February 10, 1999,
by a former dealer of Brunswick boats in the United States District Court for
the District of Minnesota. This suit, Amo Marine Products, Inc. v. Brunswick
Corporation (Amo) seeks class status purporting to represent all marine dealers
who purchased directly from Brunswick sterndrive or inboard engines or boats
equipped with sterndrive or inboard engines during the period January 1, 1986
to June 30, 1998. Sales by Brunswick of boats equipped with sterndrive or
inboard engines to dealers accounted for less than half of such engines
produced during the time period covered by the complaint; sales of such engines
directly to dealers were de minimis. The complaint seeks damages in an
unspecified amount and requests injunctive relief.
The second of these additional suits was filed on February 16, 1999,
in the Circuit Court of Washington County, Tennessee, by an individual claiming
that the same conduct challenged in the Concord action violated various
antitrust and consumer protection laws of 16 states and the District of
Columbia. In this suit, Couch v. Brunswick (Couch), plaintiff seeks to
represent all indirect purchasers in those states of boats equipped with
Brunswick sterndrive or inboard engines. The plaintiff claims damages in an
unspecified amount during the period from 1986 to the filing of the complaint
and requests injunctive relief.
On June 19, 1998, a jury awarded $44 million in damages in the
Concord suit, which was brought in December 1995 by Independent Boat
Builders, Inc., a buying group of boat manufacturers and 22 of its members.
The lawsuit was filed in the United States District Court for the Eastern
District of Arkansas, and alleged that the Company unlawfully monopolized,
unreasonably restrained trade in, and made acquisitions that substantially
lessened competition in the market for sterndrive and inboard marine
engines in the United States and Canada. Under the antitrust laws, the
damage award has been trebled, and plaintiffs will be entitled to their
attorneys' fees and interest. Under current law, any and all amounts paid
by the Company will be deductible for tax purposes.
The trial court judge denied the Company's post-trial motions seeking
to set aside the verdict and for a new trial. The judge also denied all forms
of equitable relief sought by the plaintiffs in connection with the jury
verdict, including their requests for divestiture of the Company's principal
boat manufacturing operations and orders precluding the Company from
implementing various marketing and pricing programs and from acquiring
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other marine-related companies or assets. The judge granted the Company's
motion for judgment as a matter of law on its counterclaim which asserted a
per se violation of the antitrust laws by a group of six of the plaintiffs and
awarded nominal damages. Plaintiffs dismissed, voluntarily, two related claims
which had alleged that the Company attempted to monopolize the outboard engine
and sterndrive boat markets.
On November 4, 1998, the Company filed an appeal contending the
Concord verdict was erroneous as a matter of law, both as to liability and
damages. Plaintiffs filed a cross appeal on the denial of equitable relief and
on the judgment against certain of them on the counterclaim. The Company is
not presently able to reasonably estimate the ultimate outcome of this case,
and accordingly, no expense for this judgment has been recorded. If the
adverse judgment is sustained after all appeals, satisfaction of the judgment
is likely to have a material adverse effect on the Company's results of
operations for a particular year, but is not expected to have a material
adverse effect on the Company's financial condition.
On October 23, 1998, a suit was filed in the United States
District Court for the District of Minnesota by two independent boat
builders alleging antitrust violations by the Company in the sterndrive and
inboard engine business, seeking to rely on both the liability and damage
findings of the Concord litigation. This suit originally was entitled
Alumacraft Boats Co., et al. v. Brunswick Corporation, but Alumacraft Boats
Co. was dismissed without prejudice shortly after the suit was filed. Now
captioned KK Motors et al. v. Brunswick Corporation (KK Motors), the named
plaintiffs also seek to represent a class of all allegedly similarly
situated boat builders whose claims have not been resolved in Concord or in
other judicial proceedings. Sales of sterndrive and inboard marine engines
to the Concord plaintiffs are estimated to have represented less than
one-fifth of the total sold to independent boat builders during the
six-and-one-half year time period for which damages were awarded in that
suit. The complaint in the KK Motors case seeks damages for a time period
covering slightly less than four years.
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On December 23, 1998, Volvo Penta of the Americas, Inc., Brunswick's
principal competitor in the sale of sterndrive marine engines, filed suit in
the United States District Court for the Eastern District of Virginia. That
suit, Volvo Penta of the Americas v. Brunswick Corporation (Volvo), also
invokes the antitrust allegations of the Concord action and seeks injunctive
relief and damages in an unspecified amount for an unspecified time period.
It is possible that additional suits will be filed, in either
federal or state court, asserting allegations similar to those in the
existing complaints and purporting to represent similar or overlapping
classes of claimants.
The Company has answered or will answer each of these new
complaints denying liability and asserting various defenses. In addition,
the Company has filed or will file motions to stay all proceedings in each
of these matters pending the resolution of the appeal in the Concord action
because it believes that an appellate decision in that matter is likely to
have an impact on each of these recently filed actions. In the KK Motors
case, the court has granted a stay of all proceedings on the merits of
plaintiffs' claims, but has allowed the case to proceed on class
certification and certain procedural matters. No other stay motions have
yet been ruled on.
Because litigation is subject to many uncertainties, the Company
is unable to predict the outcome of any of the above referenced actions.
While there can be no assurance, the Company believes the adverse judgment
in the Concord case is likely to be reversed on appeal and that any such
reversal will have an impact on all related actions. If the Concord
judgment is sustained after all appeals, however, and if the KK Motors
and/or Amo cases successfully proceed as class actions on behalf of all
described potential claimants substantially as alleged, and if plaintiffs
are successful, the damages ultimately payable by the Company would have a
material adverse effect on the Company's financial condition and/or results
of operations. The Company is unable at this time to assess the magnitude
of damages that either Volvo or the Couch plaintiffs might assert. Because
of a variety of factors affecting both the likelihood and size of any
damage award to these or any other potential claimants, the Company is
unable to estimate the range, amount or timing of its overall possible
exposure.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99.1 Press release announcing that Brunswick Corporation was sued in
Federal District Court in Minnesota for violation of antitrust laws.
99.2 Press release announcing that Brunswick Corporation was sued in the
Circuit Court of Washington County, Tennessee for violation of state
antitrust and consumer protection laws.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BRUNSWICK CORPORATION
DATE: February 26, 1999 By: /s/ Mary D. Allen
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Name: Mary D. Allen
Title: Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
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Exhibit No. Exhibit
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99.1 Press release announcing that Brunswick
Corporation was sued in Federal District Court in Minnesota
for violation of antitrust laws.
99.2 Press release announcing that Brunswick Corporation was sued in
the Circuit Court of Washington County, Tennessee for violation
of state antitrust and consumer protection laws.
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EXHIBIT 99.1
SUIT FILED AGAINST BRUNSWICK
Kathryn Chieger, Vice President - Corporate and Investor Relations
(847) 735-4612
For Immediate Release
LAKE FOREST, Ill., Feb. 17, 1999 - Brunswick Corporation (NYSE: BC)
announced today that it has been served with a lawsuit filed on Feb. 10, 1999
in Federal District Court in Minnesota claiming Brunswick violated various
provisions of the antitrust laws in connection with its sales of MerCruiser
sterndrive and inboard engines. The suit was filed by a former Brunswick boat
dealer, Amo Marine Products, Inc., which was dissolved in 1993. The plaintiff
requests class status purporting to represen all marine dealers who purchased
sterndrive or inboard engines or boats equipped with such engines from
Brunswick during a 12-year period. Brunswick said it believes the suit is
without merit and will aggressively defend itself against it.
This is the third filed action seeking to rely on an adverse judgement
arising out of a suit tried in Little Rock, Ark. in June 1998. The company
is in the process of appealing this verdict. While there can be no
assurances, the company believes the jury verdict will ultimately be
reversed.
Brunswick Corporation is a multinational company serving outdoor
and indoor active recreation markets with consumer products that include
such leading brands as Zebco and Quantum fishing equipment; American Camper
and Remington camping gear; Igloo coolers and ice chests; Mongoose and
Roadmaster bicycles; Brunswick bowling and family entertainment centers,
equipment and consumer products; Brunswick billiards tables; Life Fitness,
Hammer Strength and ParaBody exercise equipment; Sea Ray, Bayliner and
Maxum pleasure boats; Baja high-performance boats; Boston Whaler and Trophy
offshore fishing boats; Mercury and Mariner outboard engines; and Mercury
MerCruiser sterndrives and inboard engines.
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EXHIBIT 99.2
SUIT FILED AGAINST BRUNSWICK
Kathryn Chieger, Vice President - Corporate and Investor Relations
(847) 735-4612
For Immediate Release
LAKE FOREST, Ill., Feb. 26, 1999 - Brunswick Corporation (NYSE:
BC) announced today that a lawsuit was recently filed in Circuit Court of
Washington County, Tenn. claiming Brunswick violated various provisions of
state antitrust and consumer protection laws in connection with its sales
of MerCruiser sterndrive and inboard engines. The suit was filed by an
individual seeking to represent all retail purchasers in 17 jurisdictions
of boats equipped with such engines during a 12-year period. Brunswick said
it believes the suit is without merit and will aggressively defend itself
against it.
This is the fourth action filed seeking to rely on an adverse judgment
arising out of a suit tried in Little Rock, Ark. in June 1998. The company
is in the process of appealing that verdict. While there can be no
assurances, the company believes the jury verdict will ultimately be
reversed.
Brunswick Corporation is a multinational company serving outdoor
and indoor active recreation markets with consumer products that include
such leading brands as Zebco and Quantum fishing equipment; American Camper
and Remington camping gear; Igloo coolers and ice chests; Mongoose and
Roadmaster bicycles; Brunswick bowling and family entertainment centers,
equipment and consumer products; Brunswick billiards tables; Life Fitness,
Hammer Strength and ParaBody fitness equipment; Sea Ray, Bayliner an Maxum
pleasure boats; Baja high-performance boats; Boston Whaler and Trophy
offshore fishing boats; Mercury and Mariner outboard engines; and Mercury
MerCruiser sterndrives and inboard engines.
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