Iconix Brand Group Inc. has agreed to pay US$550,000 to settle charges by the DOJ that the company violated premerger notification rules during its recent acquisition of the clothing brand Rocawear. According to the complaint, which was filed in the US District Court for the District of Columbia on October 15, 2007, Iconix failed to produce certain internal company documents as part of the premerger notification required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).
The HSR Act imposes a waiting period and notification requirement on parties to mergers and other consolidations that meet certain size-of-transaction and size-of-party thresholds. As part of the notification requirement, parties must produce for the government certain internal documents that were prepared for company executives for purposes of evaluating and analyzing the proposed transaction in terms of markets, market shares, competition and competitors. Iconix produced no such documents during its acquisition of Rocawear, despite the existence of a presentation to the company’s board of directors and an email message that was reviewed by certain directors and officers. When asked by the government about this discrepancy the company falsely reaffirmed that no such documents existed.