April 13, 2005
Forest giant slammed for breach
After a year of thought and 138 pages of opinion, a federal banktruptcy judge in Atlanta has ruled that Weyerhauster Co. breached its warranties against infringement when it spun off a division in an IPO whose disposable diapers infringed patents held by Kimberly-Clark and Proctor & Gamble. Judge Margaret Murphy assessed damages at $457.8 milion.
One of the interesting features about the case is that ordinarily a claim for failure to disclose in an IPO would be governed by securities laws (which Weyerhauser says were not violated) but the judge decided to proceed under a contract theory.
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