Iconix Brand Group Inc. agreed to pay a $550,000 civil payment in a lawsuit involving its acquisition of Rocawear.
The Department of Justice’s antitrust division filed a civil lawsuit against the company in federal court in Washington for failing to produce specific documents before Iconix acquired Rocawear. The acquisition of Rocawear required premerger review, according to the justice department.
The complaint and agreement were filed Monday.
An Iconix spokeswoman said, “It was an inadvertent omission relating solely to the Rocawear acquisition. The matter has now been resolved and the settlement places no restriction on Iconix’s business going forward.”
According to the complaint, Iconix’s actions violated the Hart-Scott-Rodino Act of 1976 that established notification and waiting period requirements on companies over a certain size before concluding the acquisition of stock or assets above a specific value. In transactions that are subject to the provisions of the act, there are documents that have to be submitted by the company to the Department of Justice and the Federal Trade Commission.
Under the law, a company is subject to an $11,000 fine for each day it is in violation of the Hart-Scott-Rodino Act. Rocawear, the hip-hop clothing label founded by Jay-Z, was sold to Iconix for $204 million in cash in April 2007.
“Compliance with Hart-Scott-Rodino Act filing obligations is fundamental to the agencies’ ability quickly and accurately to evaluate a transaction’s competitive impact,” said Thomas O. Barnett, assistant attorney general of the justice department’s antitrust division in a statement Monday. “Filing parties must understand that the division will vigorously enforce filing requirements even if we conclude that the transaction poses no threat to competition or consumers.”
This story first appeared in the October 16, 2007 issue of WWD. Subscribe Today.