Thompson-Hayward Chemical Company

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IN THE MATTER OF THO!iPSON -HA YvV ARD CHE~fICAL COMPANY ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC 2 (a) OF THE CLAYTON ACT Docket 7527. Omnplaint, June 1959-Decision, J' uly 31, 1962 Order dismissing, because of liquidation of the business concerned, complaint charging a manufacturer of liquid laundry bleach, with plants in Kansas and Texas, with price discrimination in violation of Sec. 2 (a) of the Clayton Act.

COl\fPLAINT Pursuant to the provisions or the Clayton Aet, and by virtue of the authority vested in it by said Act, the Federal Trade Commission having reason to believe that Thompson-Hayward Chemieal Company, a corporation, hereinafter referred to as respondent, has violated the provisions or subsection (a) or Section 2 or said Act (U. , Title 15 Sec. 13), as amended by the Robinson-Patman Act, approved June 19 charges with thereto1936, hereby issues its complaintas followsstating its :respect PARAGRAPH 1. Respondent is a corporation organized, existing and doing business under and by virtue or the laws or the State or lVIissouri. Its office and principal place or business is located at 2915 Southwest Boulevard, n::ansas City 8 ~io.

P .AR. 2. Respondent is now, and for some time last past has been engaged in the business or selling industrial and agricultural chemicals, some of which it manufactures, for use, consumption, and resale within various States or the United States. Respondent operates approximately 18 branches or divisions in 12 States, its total annual sales amounting to approximately $24 million. Among said products which respondent manufactures is bleach including liquid laundry bleach. One or its bleach plants is located in the State or I\::ansas and another in the State or Texas. PAR. 3. Respondent is now, and for some time prior to the year 1954 has been, engaged in CO1lli11erce, as "commerce" is defined in the Clay- Initial Decision 61 F.

ton Act, as amended, in that it ships or causes to be shipped bleaeh from the State of lCansas to purchasers located in other States or the United States.

PAR. 4. During the year 1954 respondent established a bleach plant in Dallas, Texas, and since that time has been engaged in selling bleach to customers, including laundries, in the Dallas-Fort worth, Texas trading area. In the course or such sales or bleiwh, it has been and is competitively engaged with other corporations and with partnerships firms, and individuals. The liquid laundry bleaeh manufactured at and sold and shipped from its Dallas plant was and is of like grade and quality with that manufactured at and sold and shipped from its Kansas plant.

PAR. 5. Prior to the year 1954 and since that time, respondent, in its sales or liquid laundry bleach to customers located in the Kansas City, Missouri, area, has charged the following prices: Price1 only five gallon crate-__--__------------------------------Quantity$0.7i:i per gallon 2 to 4 five gallon crates---__-------------------------------- .50 per gallon 5 or more five gallon crates_____----------------------------- .40 per gallon Shortly after respondent opened its plant at Dallas, Texas, it began selling liquid laundry bleach in the Dallas-Fort V\rorth area at a price or $.25 per gallon in five-gallon crates and subsequently cut this price to $.20.

PAR. 6. Suc.h differenees in prices charged resulted in price discrimination. As a result or respondent' s said pricing practices a substantial number or customers have been lost by its competitors to respondent, and said competitors have suffered a serious loss or business.

The effect or such discriminations in price made by respondent as alleged herein, may be substantially to lessen competition or tend to ere ate a monopoly in the line or commerce in which said respondent is engaged, or to injure, destroy, or prevent competition with respondent.

PAR. 7. The foregoing acts and practices or respondent, as above alleged, violate Section 2, ( a) or the Clayton Act, as amended. MT. BTockm/ln H OTne supporting the complaint. Aft. O. E. LO1nDaTdi, J'J'. or Oald~()ell, Black~()ell, Oli-ve'J' Sanders for respondent, Kansas City, Nlo.

INITIAL DECISION BY JOHN B. POINDEXTER HEARI?-W Ex.UIINER The Thompson-Hayward Chemiea.! Company, a corporation, hereinafter c.alled respondent, is charged with price discrimination in the THOMPSON-HAYWARD CHEMICAL CO. 325 323 Initial Decision sale or liquid laundry bleach manufactured and sold by it, in violation of the provisions of subsection (a ) or Seetion 201 the Clayton Act (U.S. C., Title 15, Sec. 13), as amended by the Robinson-Patman Act approved June 19, 1936.

In May, 1960~ a four-day hearing was held at which time oral testimony and documentary evidence wrus received in support or and in opposition to the allegations or the complaint. Counsel supporting the complaint did not rest his ease-in-c.chief at this heruring. The proeeedil1g is now before the hearing examiner upon the motion filed by Commission counsel to dismiss the complaint on the ground that the matters in issue have become moot. Naturally, opposition to said motion to dismiss has not been filed.

The motion to dismiss is based upon an affidavit executed by R. S. Thompson, President or Leeds Investment Company, a Missouri corporation, formerly named Thompson-Hayward Chemieal Company, the respondent herein. The affidavit, which is attached to the motion to dismiss filed by counsel supporting the complaint states, among other things, the following :

On June 1, 1961, Thompson-Hayward Chemical Company, the corporate respondent, exchanged all or its assets (including all assets used in the manufacture and sale or liquid laundry bleach), with the exception or a certain amount or cash retained for payment or expenses for shares or stock or Consolidated Electronics Industries Corp., a Delaware corporation, representing less than 8% or the total outstanding stock or that company; upon the completion or this exchange, the corporate respondent Thompson-Hayward Chemieal Company changed its name to Leeds Investment Co. and distributed to its shareholders all or its assets with the exception or the cash referred to above, and a certain portion or said shares which it is required by the terms or its eontraet with Consolidated Eleetronics Industries Corp. to retain for a period or twelve months from June 1 , 1961, to secure any claim or the latter company with respect to undisclosed liabilities; the said Leeds Investment Company is in the process or liquidation and upon the completion or the said twelve-month period, its liquidation will be completed; neither the said company nor its stockholders have any intention or entering the bleach business again; that the abovedescribed transactions were entered into by reason or business considerations only, and not for the purpose or frustrating the pending eomplaint.

The affidavit further states that the assets acquired by Consolidated Electronies Industries Corp. were transferred to a wholly owned subsidiary, a Delaware corporation, which has been named Thompson- 728-122-65- Syllabus 61 F.

Hayward Chemical Company; that most of the managerial and operating personnel of the old Thompson-Hayward Chemical Company, respondent in this proceeding, have become employees of the new Thompson-Hayward. Chemical Company, a Delaware corporation although Mr. C. T. Thompson, who was the chief executive officer and determined the policy or the old company, is not active in the management or the new company, and policy and operational management ~r the new company are governed by the Board or Directors and man- :agement of Consolidated Electronics Industries Corp. in cooperation with the Board of Directors and local management of its subsidiary, the new Thompson-Hayward Chemical Company; and neither the old company nor its stockholders were in any way related to the new company prior to the above-described transaction. The motion to dismiss states that the address or Consolidated Electronics Industries Corp. is 100 East 42nd Street, New York 17, New York. The motion further states that, by reason or the facts set out in the affidavit and which are recited above, the case pending against the corporate respondent is m09t and no purpose will be served by further prosecution or this proceeding. The hearing examiner has considered said motion to dismiss and the contents or the affidavit and is of the opinion that it will not be in the public interest to further litigate the ads and practices alleged to have been performed by the corporate respondent prior to its change or name and acquisition by Consolidated Electronies Industries Corp. and dissolution. Accordingly, I t is mode/red That the complaint in this proeeec1ing be, and the same hereby is, dismissed.

DECISION OF THE COl\fl\IISSION Pursuant to Section 4.19 or the Commission s Rules or Practice effective June ,1 , 1962, the initial decision or the hearing examiner shall, on the 31st day of July 1962 become the decision or the Commission.