March 12 (Bloomberg) -- Exide Technologies, the 125-year-old battery maker, asked for court permission to hire law firm King & Spalding LLP as its special antitrust counsel to investigate possible price manipulation in the lead market.
The company seeks approval of a Feb. 20 agreement with King & Spalding, according to a filing yesterday in U.S. Bankruptcy Court in Wilmington, Delaware. The Atlanta-based law firm has been involved in “virtually all of the significant antitrust cartel cases” in the past decade, Exide said.
The request follows an attempt by Exide’s unsecured creditors’ committee to hire a consultant to investigate whether there has been price manipulation in the lead market that may have harmed the company, which used the metal to make batteries.
The creditors cited allegations that the London Metal Exchange and warehousing companies may have conspired to artificially create delays in lead shipments to increase storage fees and drive up the metal’s price. They said the allegations arose after the U.S. Commodities Futures Trading Commission and the Justice Department decided to open an investigation of the LME and warehouses regarding aluminum.
U.S. Bankruptcy Judge Kevin J. Carey urged Exide to coordinate with the creditors after the company opposed their request at a Feb. 20 hearing.
The battery maker argued at the hearing that there was little likelihood that it was susceptible to any price fixing because it buys very little lead in the U.S. and none from LME warehouses where the alleged misconduct supposedly occurred.
Exide filed for bankruptcy in June, about two months after regulators shuttered the company’s lead-recycling plant in Vernon, California. The plant was allowed to restart in June and a California judge ruled in July that it could stay open pending a decision by a lower court, according to filings.
The Milton, Georgia-based company listed debts of $1.14 billion and assets of $1.89 billion in its Chapter 11 filing. Exide has about 3,600 employees and operations in more than 80 countries, making lead-acid batteries used in cars, trucks, tractors and boats.
This is Exide’s second trip through bankruptcy. The company reorganized in 2004, winning court permission to eliminate $1.3 billion in debt in exchange for giving lenders about 90 percent of its stock. The other 10 percent went to unsecured creditors.
The case is In re Exide Technologies, 13-bk-11482, U.S Bankruptcy Court, District of Delaware (Wilmington).
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