United States Steel Corporation

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In tar Marter or UNITED STATES STEEL CORPORATION* Docket 8655. Order and Opinion, October 19, 1972. Order modifying the initial decision following remand by U.S.C.A. 6th Circuit, to conform with the views set forth in the Commission’s opinion, adopting the modified initial decision following remand, and directing the filing of the findings and conclusions with the court. The Commission ruled that a *See joint Initial Decision In the Matter of National Portland Cement Company, Docket No. 8654, 71 F.T.C. 399.

Initial Decision on Remanded Issues 81 F.T.C. pre-acquisition loan arrangement had substantially the same anticompetitive effect as the acquisition itself.

Mr, Joseph J. OMalley, Mr. Wilbur W: Sacra, Jr., and Mr. Larry D. Sharp supporting the complaint.

Mr. Macdonald Flinn, Mr. Thomas B. Leary, Mr. Benjamin M. Vandergrift and Mr. Mario Diaz-Cruz, III, of White & Case for the respondent.

Inrt1au Decision on Remanpep Issues sy Joun Lewis, Hearine Examiner JANUARY 14, 1972 STATEMENT OF PROCEEDINGS .

This proceeding is now before the undersigned hearing examiner pursuant to the Commission’s order of September 25, 1970 [77 F.T.C. 1646], reopening the proceeding and remanding it to him for the purpose of receiving evidence on certain specific issues. Such remand was the result of a decision of the Court of Appeals for the Sixth Circuit, filed May 6, 1970 [426 F. 2d 592, 6th Cir. 1970], which remanded this matter to the Commission for further findings of fact. The complaint herein, which was issued January 22, 1965 [74 F.T.C. 1270], charged respondent with having violated Section 7 of the Clayton Act, as amended, by acquiring the stock and assets of Certified Industries, Inc. (Certified), a ready-mixed concrete producer in the New York City metropoltian area, such company being a customer of respondent’s Universal Atlas Cement Division (UAC) at the time of the acquisition. Following hearings between October 11 and November 22, 1965, the undersigned hearing examiner issued his initial decision on May 20, 1966 [71 F.T.C. 399], dismissing the complaint herein on the ground, essentially, that the evidence established Certified was a failing company within the meaning of the so-called “failing company” doctrine, which had been pleaded as a defense by respondent. Complaint counsel had urged before the examiner after the original hearings that, (a) respondent had failed to establish Certified was a “failing company” within the meaning of the defense as initially enunciated in International Shoe Co. v. Federal Trade Commission, 280 U.S. 291 (1930) and (b), in any event, the defense is not an “absolute,” but a “relative,” defense and does not confer complete immunity on an acquisition which will have the adverse effect. on competition proscribed by the statute. In his initial decision, issued May 20, 1966 [71 F.T.C. 399], the undersigned held that respondent had established the requisite elements of the failing company defense since it had shown that, UNITED STATES Sune.

629 Initial Decision on Remanded Issues (1) Certified was in failing circumstances at the time of the acquisition and (2) there was no other prospective purchaser then available for Certified’s stock or assets. He further held that the failing company doctrine provided a complete defense to the acquisition, but that to the extent it provided merely a “relative” defense, as complaint counsel had urged, the latter had failed to establish that the acquisition would be likely to have the effect on competition required to be shown under the statute. After extended consideration of the matter the Commission, in its decision issued December 2, 1968 (with two Commissioners not participating and one dissenting) , reversed the examiner’s decision. While agreeing that “the examiner was correct in finding that Certified was failing,” it held that the failing company doctrine did not provide a complete defense to the acquisition. Since, in its view, the evidence established that in spite of Certified’s failing condition the acquisition would have the detrimental effect proscribed by the statute, the Commission held that a violation of Section 7 had been proven: The court of appeals held that there was substantial evidence to support the Commission’s finding that Certified’s acquisition would have an adverse competitive effect in spite of its failing condition. However, the court found it unnecessary to determine “whether [the effect of] ‘failing company’ status is to immunize an acquisition or is merely a factor to be weighed in determining whether the acquisition is in the ‘public interest?” since, in the court’s view, respondent had failed to establish it had met all of the requirements of the failing company defense, as amplified by the Supreme Court’s most recent holding in Citizen Publishing Co. v. United States, 394 U.S. 131 (1969). As noted by the court of appeals, prior to the Citizen Publishing Co. decision the requirements of the failing company defense were considered to be met by a showing (1) “that the financial condition and resources of the company are so dire that ‘it faced the grave probability of a business failure’” and (2) that there was “no other prospective purchaser” of the acquired company. However, the Supreme Court’s decision in Citizen Publishing Co. had added a third requirement to the defense, v7z., that “the prospects of the acquired company emerging from reorganizatior as a competitive unit must be ‘dim or non-existent.’ ” Since the Cidizei Publishing case had been decided subsequent to the examiner’s and th Commission’s decisions herein, the circuit court considered it “appre priate to remand this case [to the Commission] to give USS. Steel : opportunity to bring forth evidence that the prospects of Certified pa: ing through bankruptcy or similar proceeding were ‘dim or nonex tent? [following which] the Commission will be in a position * * * make a finding of fact as to this crucial element in the failing comp: defense.”

£rEiDERAL TRADE COMMISSION ‘DECISIONS Initial Decision on Remanded Issues 81 B.T.C. In remanding the case, the court also charged the Commission with the responsibility of resolving a further issue, relative to the date to be used for evaluating Certified’s failing condition. The date used by the hearing examiner in determining whether Certified was in a failing condition was the date of Certified’s acquisition, viz., on or about April 30, 1964. In so doing, the examiner had overruled the argument of counsel supporting the complaint that the appropriate date to use was January 1963, which was the date when Certified had obtained a long-term bank loan guaranteed by respondent. After reviewing the examiner’s holding in “this regard, the Commission concluded : “We agree with this [the hearing examiner’s] conclusion. Complaint “counsel’s argument is therefore rejected.

The court of appeals suggested that the cement-purchasing arrangement between Certified and U.S. Steel’s cement subsidiary UAC, following the loan agreement, might be illegal and directed the Commission to “reassess the standards by which the actions and defenses of United States Steel Company are to be judged.” It stated, in this regard, that:

[T]he record reveals that U.S. Steel-Certified vertical ties may have taken an unlawful cast as early as January 1963. If such vertical ties were unlawful, then the failing character of Certified must be shown to have existed at that time. * * * To the extent that unreasonable foreclosure of Certified’s cement demands occurred as a result of the financial arrangement in January 1963, we believe that the failing company defense must be measured from the inception of these unreasonable vertical arrangements, not from the point of their final consummation.

Following the court of appeals decision of May 6, 1970, remanding this matter to the Commission for further consideration in the light of the Supreme Court’s holding in the Citizen Publishing Co. case, the. Commission, by order issued September 25, 1970, remanded the proseeding to the undersigned hearing examiner. The examiner was diected to conduct hearings for the purpose of receiving evidence * * * with respect to the issues of whether :

(a) as of January 1963 the financial condition and resources of Certified Instries were so dire that it faced the grave probability of a business failure, ‘b) between January 1963 and April 1964 no prospective purchaser other than ited States Steel Corporation was interested in acquiring Certified, c) “Certified’s opportunity for some form of continued competitive vitality vugh bankruptey or similar proceedings” was “dim or nonexistent” either in jary 1968 or in April 1964, and ) the U.S. Steel-Certified vertical ties did in fact take an unlawful cast as -as January 1963.

Wave eee wane :

629 Initial Decision on Remanded Issues The Commission’s order further directed the hearing examiner, upon termination of the hearings, to prepare an initial decision “confined to the issues hereinabove specified.” , Following the Commission’s remand order of September 25, 1970 [77 F.T.C. 1646], the examiner convened a prehearing conference on October 29, 1970, for the purpose of delineating the issues remanded to him for consideration and the setting up of a procedural schedule, the results of said conference being embodied in the examiner’s Prehearing Order No. 1 (PHO 1). At such conference the examiner overruled the position of complaint counsel, who had argued that the burden of proof under subparagraph (ad) of the Commission’s order (viz., whether the “vertical ties” between respondent and Certified had taken on “an unlawful cast” as early as January 1963), was upon respondent and not upon the government. Complaint counsel indicated that they _ might decide to rest upon the existing record on this issue, but reserved a decision in this regard to a later date. They thereafter elected‘not to offer any further evidence on this issue. Respondent took the position that unless complaint counsel offered further evidence to establish the illegality of the vertical arrangement in January 1963, it would restrict its evidence to the period of the acquisition in April 1964, and would limit it to the issue remanded under subparagraph (c) of the Commission’s order (viz., whether as of April 1964 Certified’s opportunity for continued competitive vitality through bankruptcy or similar proceedings was “dim or non-existent”). Respondent also raised the question whether subparagraph (b) of the remand order was intended to reopen the question of the availability of other purchasers in April 1964, and indicated that it intended to file a motion requesting certification of this question to the Commission. The examiner stated that he did not interpret the Commission’s order as reopening this issue, and that further evidence by respondent under subparagraph (b) would be required only if complaint counsel were to establish that the vertical ties became unlawful in January 1963 or at some period prior to the acquisition. However, respondent was given an opportunity to file a formal motion requesting certification of this issue to the Commission, which motion was thereafter filed by respondent and was denied bv the examiner’s order of November 19, 1970. Pursuant to discussions had at the prehearing conference, respondent filed a motion for the issuance of a number of subpoenas duces tecum, for discovery purposes, to various cement manufacturers and readymixed concrete firmis to produce sales and financial data for the period 1964-69. Said motion was opposed by complaint counsel on the ground that the post-acquisition data sought to be obtained were irrelevant to the issues remanded in this proceeding. By order dated November 20, 494-841—73—_41 634 FEDERAL TRADE “COMMISSION DECISIONS Initial Decision.on Remanded Issues 81 F.T.C, 1970, the examiner granted respondent’s motion and issued the re-' quested ‘subpoenas duces tecum. Although most of the third parties produced the data requested, motions to quash said subpoenas duces tecum were filed on behalf of. several of them on the ground that the information sought was irrelevant and confidential, and would be burdensome to produce. Said motions were denied by separate orders of the examiner issued in December 1970 and January 1971. Following _ appeals from said orders by the third parties, with complaint counsel having been granted leave to intervene, the Commission issued its order on March 4, 1971 [78 F.T.C. 1569], granting the appeals and directing the quashing of the subpoenas duces tecum theretofore issued by the hearing examiner.

Thereafter, a second prehearing conference was held on April 7, 1971, at which respondent indicated that as a result of the Commission’s order quashing the subpoenas duces tecum, it would have to revise its defense strategy, insofar as it involved the use of post-acquisition data obtained from third parties, and that it would return the data submitted by a number of the third parties who had not filed motions to quash. A revised, procedural schedule was agreed upon, which is embodied in the undersigned’s Prehearing Order No. 2. Hearings for the reception of evidence were thereafter convened on July 18, 14, and 15, 1971, in New York, New York. Evidence was offeréd at said hearings by respondent in support of the issue as to which the examiner had ruled it had the burden of proof, viz., whether Cortified’s opportunity for some form of continued competitive vitality through bankruptcy or similar proceedings was “dim or non-existent” as of the time of the acquisition by respondent in April 1964. No evidence was offered by respondent with respect to the period January 1963, inasmuch as it made no contention that Certified was a failing company as of that time, and further contended that it was under no obligation to offer any evidence concerning this period unless complaint counsel first established that the arrangement with Certified had become illegal as of January 1963. The only evidence offered by counsel supporting the complaint was with respect to the same issue as to which evidence had been offered by respondent. Pursuant to leave granted by the undersigned, proposed findings of fact and conclusions of law were filed by the parties on September 1, 1971, and replies thereto were filed on Septernber 15, 1971.7 17The proposed findings filed by each of the parties were with respect to the issues as to which the examiner had ruled they had the burden of proof. Respondent's proposed findings were directed to subparagraph (c) of the Commission’s remand order, and complaint counsel’s proposed findings were directed to the remaining subparagraphs. The replies contain each party’s position with respect to the opposing party’s proposed findings on the issue or issues as to which the opposing party bad the burden of proof. 629 Initial Decision on Remanded Issues After having carefully reviewed the evidence in this proceeding, the proposed findings of fact and conclusions of law and the replies there,? and based on his observation of the witnesses, the undersigned makes the following findings and conclusions as to the remanded issues:

A. The Prospects of Certified’s Surviving Through Bankruptcy or Similar Proceedings in April 1964 1. The evidence offered by respondent consisted essentially of, (a) testimony and documentary evidence by officials of respondent and Certified, purporting to show that the state of Certified’s equipment and business at the time of the acquisition was such that there was no likelihood of Certified’s survival without the infusion of substantial amounts of new capital, and that despite the infusion of substantial amounts of capital by respondent, Certified’s operation continued to lose substantial amounts of money in the years succeeding the acquisition, at least through 1967; (b) the testimony of witnesses from the ready-mixed concrete industry purporting to show that a substantial number of ready-mix operators in the New York City metropolitan area (NYMA) went out of business both prior to and after Certified’s acquisition, and that not a single company had been able to successfully reorganize through bankruptcy or similar proceedings; and (c) the testimony of two experts in the field of bankruptcy and reorganization to the effect that the prospects of Certified’s being reorganized in April 1964 were dim or nonexistent.

2. Before discussing such evidence it should be noted that the financial data offered by respondent concerning Certified’s financial condition in the post-acquisition period and as to the infusion of additional capital by respondent, were received in evidence over the objection of complaint counsel. The basis of counsel’s objection was that the Commission’s order of March 4, 1971, quashing the subpoenas duces tecum issued at the instance of respondent for the production of post-acquisition financial data by third parties, precluded the receipt into evidence of respondent’s own post-acquisition data. Such objection was overruled by the examiner. While the undersigned’s conclusions here would be the same irrespective of whether the post-acquisition data are con- 2 Proposed findings not herein adopted, either in the form proposed or in substance, are _ Tejected as not supported by the evidence or as involving immaterial matters. References to proposed findings are made with the following abbreviations: “RPIr” (for respondent’s proposed findings)’; “CPF” (for complaint counsel’s proposed findings) ; ‘‘RR” (for respondent’s reply) ; “CR” (for complaint counsel’s reply). Other abbreviations used herein are: “Dy.” (for transcript of testimony) ; “CX”? (for complaint counsel’s exhibits) ; “RX” (for respondent’s exhibits) ; “I.D.” (for examiner’s original Initial Decision). Initial Decision on Remanded Issues 81 FVL.C. sidered or not, in his view such evidence is unquestionably relevant. The Commission’s order holding such evidence not to be relevant, insofar as the third party subpoenas duces tecum were concerned, was based principally on the holding of the Supreme Court in Federal Trade Commassion v. Procter & Gamble Co., 386 U.S. 568. The holding of that case, that a showing of actual anti-competitive effect is not a “requirement” for establishing the “probability” of competitive injury under Section 7 of the Clayton Act is not, in the opinion of the undersigned, tantamount to a holding that post-acquisition evidence has no logical probativeness.* Moreover, where the issue is one of the prospect of a company’s being successfully reorganized, evidence as to actual financial developments in the affairs of the company and in the industry during the post-acquisition period, while not a requasite element of proof, cannot be said to be without logical probativeness as providing a backdrop against which to compare a forecast as to what a company’s prospect for reorganization would have been if it had not been acquired.

3. The evidence establishes that the nature of the ready-mixed concrete industry, as an industry, is such that it does not readily lend itself to reorganization once a company experiences serious financial difficulties. This is particularly true of the industry in the NYMA. The product, ready-mixed concrete, is a homogeneous product which is sold primarily on a price basis. There is little or no customer loyalty in the industry, and continuing customer relationships characteristic of other industries are lacking. There is no such thing as goodwill or going concern value, as an asset against which funds can be raised when a company is experiencing financial difficulty (Tr. 1381, 1384, 1403, 1407-09, 1483-34, 1498, 1520-21). The business involves substantial fixed costs, and volume is essential to spread these costs. There is, therefore, a tendency to bid low on jobs in order to maintain volume, despite the fact that the price will result in little or no profit (Tr. 1375-78, 1386-87, 1482, 1434, 1437, 1464-66). Maintenance of an efficient truck fleet is essential to a company’s successful operation since, in addition to price, dependable and fast delivery is essential to obtaining business and continuing customer relationships. However, once a company experiences financial difficulty, there is a tendency to reduce 3In United States v. Falstaff Brewing Corp., 333 F. Supp. 970, 972 (D.C. R.I., 1971), the court held that post-acquisition evidence showing a decline in market share was admissible, stating: ° “Tt is well established that post-acquisition evidence is admissible in an action such as this and may properly be considered in determining whether the probable effect of said merger will be a substantial lessening of competition * * *. [TJhere is no evidence that [the acquiring corporation] during said period did not make every effort to realize the benefits it hoped to obtain by its acquisition.”

UNITED dias vse 629 Initial Decision on Remanded Issues costs by avoiding replacement of obsolete trucks and by reducing maintenance on the existing fleet. This results in more frequent truck breakdowns and the need to cannibalize parts from other trucks, thus compounding the problem (Tr. 1489, 1441, 1448-50, 1513-14, 1526-27)... The ability of a company in financial difficulty to raise additional capital against its assets is minimal. Generally, its trucks are encumbered by mortgages, and even where not encumbered they generally bring only a fraction of their cost in a sale. In the case of multi-plant companies, the prospect of selling off one or more plants is remote where the industry as a whole is suffering from overproduction and a declining demand. The cost of borrowing against accounts receivable ‘s high and once this avenue has been pursued, it is no longer available if additional funds are required. The problems of a company in financial difficulty are compounded by the traditional slowness in payment of accounts receivable by ready-mixed concrete customers, by the practice of asserting “back charges” for alleged late or defective delivery, and by the tendency to cancel orders because of concern that the supplier will be unable to deliver (Tr. 1882-83, 1388-92, 1402, 1409-10, 1431, 1434, 1437-89, 1443, 1469-70, 1504, 1521). 4. All of the problems of the ready-mixed concrete industry in the NYMA were reflected and intensified in the case of the acquired company here involved, Certified Industries. Its financial losses had increased in the latter part of 1963 and early 1964. It was being pressed for payment by its creditors. The condition of its truck fleet was poor, with about 40 percent of its trucks being overage. Without the infusion of additional capital to repair, remodel and replace trucks, Certified was at the point where it could not have maintained enough efficiency to continue in operation. Plants and other equipment were in a bad state of repair. Despite economy measures, including reductions of salaries and the closing of some plants, it was unable to stem the tide of loss. Its need for working capital was such that within one week after the acquisition, it would have been unable to meet its payroll, to say nothing of paying for rent, utilities and material charges. The only thing that could have kept it alive was the infusion of new capital. Other than respondent, which had become involved in Certified’s affairs through its guarantee of the loan from Bankers Trust Company, there was no one else on the horizon who would have been willing to provide such funds. In the case of respondent, its willingness to make further financial commitments was conditioned on its ability to have a controlling voice in trying to turn Certified around, viz., by acquisition of the company (Tr. 1872 X—Y, 1448-53, 1464-65, 1467-72, 1522, 1531, 1535-36; CX 62). - Initial Decision on Remanded Issues 81 FL.C. 5. The prospect that Certified could have been successfully reorganized must be viewed against the background of the financial travail of ready-mixed concrete companies in the NYMA during this period, and the fact that not a single one was successfully reorganized through bankruptcy or other proceedings.* The record. establishes that a sub- ‘stantial number of companies left the market during this period because of their financial inability to withstand the onslaughts of the intense, dog-eat-dog competition of a declining market. This process, which started several years prior to the acquisition of Certified, continued thereafter and included several of the firms listed in the original initial decision herein as being among the top companies in the industry (Tr. 1379-82, 1392-93, 1408-14, 1498, 1472-74, 1493; ILD. par. 102-07, at 39-41 [71 F.T.C. 436-8]).° While, as complaint counsél sought to show, new companies in some instances took over or bought out the assets of departing companies, the rapid and widespread turnover of companies is itself a reflection of the depressed financial condition of the industry.® , 6. Although, as above noted, Certified’s ability to survive was dependent on the infusion of outside capital, which only respondent was willing to provide, even this was not sufficient to stem the adverse tide of its business. During the period from April 1964 (when the acquisition took place) to December 31, 1967, respondent invested $14,320,277 in the Certified operation to cover the need for new or improved equipment and to provide for payment on bills that were due and various obligations that were owing (RX 70, 71, 76-81; Tr. 1372 L). Various economies were effected by more efficient management, including reduction of management salaries, clerical costs, interest, and insurance costs, the providing of various free services through the personnel of respondent’s UAC Division, and the reducing of operating costs by closing various plants (Tr. 1872 S-W, 1534-40). Despite these efforts, Certified’s losses continued and its volume remained static or declined, «Several of the companies made assignments for the benefit of creditors, but this was merely a vehicle for their dissolution or liquidation (Tr. 1411-13, 1428-33, 1393). 5M. I. Hickey, which was the fifth ranking ready-mix producer in the NYMA in 1964, went out of business in 1967 because it could no longer meet its financial obligations (Tr. 1493). Some of its trucks were sold at distressed prices, as were two of its plants which were dismantled by the purchasers. Its other two plants could not be sold (Tr. 1496). Century Transit Mix, the sixth ranking producer, went out of business in 1965 (Tr. 1474, 1610). Cooney, the seventh ranking producer, after combining with another producer, discontinued operation of a number of its plants in 1966 (Tr. 1519-20). *The only evidence offered by complaint counsel on the remand of the proceeding was a single witness from the Industry, through whom they sought to show that a number of companies had entered the ready-mix business in the eastern portion of the NYMA In recent years. The testimony of the witness corroborates the evidence offered by respondent as to the number of companies leaving the market because ‘‘they went broke’ (Tr. 1611), and indicates that most so-called new entrants merely took over the facilities of defunct companies.

O. ere:

pur eo ON

UNITED STATES SiPHHL Cunr. wav 629 . Concurring Opinion CONCLUSIONS 1. The record fails to establish that the U.S. Steel-Certified ties or business arrangements in January 1963, or at any period prior to the acquisition in April 1964, took on an unlawful cast of such a nature as to require a showing by respondent that the elements of the failing company defense were met as of such earlier date. 2. It is unnecessary to consider whether Certified faced a grave probability of business failure as of January 1963, in view of the conclusion reached in Paragraph 1 above.

3. It is unnecessary to consider ‘whether any other prospective purchaser was interested in acquiring Certified in January 1968 or at any time prior to the period of the acquisition in view of the conclusion in Paragraph 1 above, and in view of the fact that the matter of the availability of other purchasers in April 1964 and for a reasonable period prior thereto has already been considered in the examiner’s origina] initial decision herein.

4. The record establishes that Certified’s opportunity for some form of continued competitive vitality through bankruptcy or similar proceedings was dim or nonexistent in April 1964. In view of the conclusion reached in Paragraph 1 above, it is unnecessary to determine what the prospects for such continued competitive vitality were as of January 1963.

Concurring OPINION oF CHAIRMAN JKCIRKPATRICK I concur in the order herein and join in the opinion to the extent that it holds that the loan arrangement between U.S. Steel and Certified was unlawful under Section 5 of the Federal Trade Commission Act and that Certified was not in a failing condition in January 1963, for the purposes of the failing company defense. Also, to the extent that the opinion and mandate of the Court of Appeals require our disposition of this matter to rest upon a January 1963 application of that defense, this Commission is, of course, not free to hold otherwise. However, my view would be that the failing company defense should be evaluated as of the date of the acquisition of “share capital” or of “any part of the assets of another corporation.” That date could be the date of the acquisition or merger or it could also be an earlier date upon which the two companies may have entered into a transaction or arrangement tantamount to such an acquisition but not such in the strict legal sense. In the latter event, as in Citizen Publishing, the failing company defense should be considered as of the date of that transaction or arrangement. But that would not appear to be 494-841 —73——42 Dissenting Opinion 81 E.T.C.

the case here. I would not conclude that the loan arrangement between Certified and U.S. Steel constituted the equivalent or an acquisition or was such as to lead inevitably thereto. The fact that such January 1963 transaction may have violated Section 1 of the Sherman Act, Section 5 of the FTC Act, or Section 3 of the Clayton Act would not, in my view, give rise to the application of Section 7 of the Clayton Act as of that date.

I would also like to note that I concur in the Commission opinion of December 2, 1968, with respect to the scope of the failing company defense.

Dissenting Opinion: By Commissionrr DENNISON oe Being unable to subscribe to the majority’s view that there existed a vertical “tying” arrangement which had taken an unlawful cast at | the time of the loan agreement in January 1963, nor with the view that. the “failing company” defense is not an absolute defense, I am compelled to dissent. I do not find the loan guarantee agreement of such a nature as to create an actionable restraint of trade. Furthermore, even if an unlawful restraint did exist, I do not find any causal relation between such restraints and Certified’s failing condition in April 1964.

As to the first question, the law is clear that not every conceivable “tie-in” arrangement falls within the rigid per se category of illegality. The very same Court of Appeals which reviewed this proceeding has construed the Supreme Court’s Fortner decision as requiring an affirmative showing that the seller possessed “economic advantage” or “power” in the market of the tying product before the per se doctrine attaches. Fortner Enterprises, Inc. v. United States Steel Corp., 452 F. 2d 1095, 1101 (6th Cir. 1971). Without this qualification, perfectly harmless, or even beneficial arrangements reasonably sought by the customer, would be needlessly barred. No attempt has been made by complaint counsel to show that U.S. Steel had financial or other advantages over other lenders in the New York area that gave it any such market power. The only thing unique about U.S. Steel in this regard was its willingness to guarantee the bank loan to Certified. But such willingness in and of itself does not establish market power or advantage in the lending market. See Fortner Enterprises, Ine. v. United States Steel, 394 U.S. 495, 505 (1969). The fact that Certified was willing to buy cement from respondent at a price that was sometimes in excess of a competitor’s price does not demonstrate leverage in the credit market since the price of the total package (zc. the price of credit included, considering the risks involved) may have 629 Dissenting Opinion been a competitive price to Certified, not a monopolistic price. See “Credit as a Tying Product,” 69 Col. L. Rev. 1435, 1443 (1969). Nor do I see any justification for concluding that the financial arrangement here was an actionable restraint of trade under a “rule of reason” or other test applicable to requirement contracts. As the Commission noted in its original decision in this matter, the January 1963 loan enabled Certified to retain its independent status rather than become permanently integrated into a cement company, which appeared the likely alternative at that point in time. It is true that during the ensuing calendar year Certified in return purchased somewhat more than half its cement requirements from U.S. Steel thus foreclosing some part of the market. But this does not amount to the type of total and permanent foreclosure that results from an acquisition. It is not enough in my view to point to the fact that the Commission found (and the Court affirmed) that the later vertical acquisition was actionable under Section 7 of the Clayten Act. As the Court of Appeals itself noted, the standard for adjudging the legality of requirements contracts is more tolerant with respect. to requirements contracts than vertical integration by acquisition. U.S. Steel Corp. v. Federal Trade Commission, 426 F. 2d 592, 601 (6th Cir. 1970). See also Brown Shoe Co. v. United States, 370 U.S. 294, 330-382 and n. 55 (1961) (“ownership integration is a more permanent and irreversible tie than is contract integration”). If the test for measuring the market for foreclosure effect announced in Tampa Llectrie Co. v. Nashville Coal Co., 365 U.S. 820 (1961), is used (in this case, the area in which competing cement sellers could practicably turn for customers), the amount of foreclosure occasioned during 1963 does not on its face appear substantial. Certified’s purchases of cement from U.S. Steel’s division constituted about 1.2 percent of, total shipments by cement plants that served the New York area. In view of the fact that the loan arrangement had the salutory possibility of keeping Certified intact as an independent non-integrated competitor in the highly concentrated ready-mix market (a market much more concentrated than the cement market and one which was dominated by one company, Colonial Sand and Stone, possessing 50 percent of sales), I think the financial arrangement should not be condemned on some mechanical test of “foreclosure” to cement suppliers.

Furthermore, [ agree with Chairman Kirkpatrick that the vertical arrangement in January 1963 did not amount to, or lead ineluctably to, a more permanent form of integration attackable under Section 7. Nor do I find any persuasive evidence that the arrangement caused 652 FEDERAL ‘TRADE. COMMISSION DECISIONS Opinion 81 E.T.C.

Certified’s “failing condition” in April 1964 or contributed to the fact that there were no other available purchasers at that time. It seems clear to me that Certified failed not because of the loan arrangement but in spite of it. 7 Regarding the legal relevance of the failing company doctrine, I would associate myself with former Commissioner Elman’s dissent in this matter [74 F.T.C. 1805].

OPrINIon oF THE Commission By Drxon, Conumissioner:

An order to cease and desist was issued by the Commission in this matter on December 2, 1968 [74 F.T.C. 1270]. Thereafter. the order was reviewed by the United States Court of Appeals for the Sixth Circuit, and in an opinion issued May 6, 1970 [426 F. 2d 592, 6th Cir. 1970], the court remanded the case to the Commission for further findings of fact and further: proceedings in light of the Supreme Court’s holding in Citizen Publishing Company v. United States, 394.U.S. 131 (1969), as well as the views of the Court of Appeals set forth in its opinion.

The complaint herein, filed January 22, 1965, charged that United States Steel Corporation, a large producer of portland cement through its Universal Atlas Cement Division, had violated Section 7 of the Clayton Act by acquiring Certified Industries, Inc., one of the four largest ready-mixed concrete producers in the New York City metropolitan area.

On May 20, 1966 [71 F.T.C. 399], Hearing Examiner John Lewis filed an initial decision dismissing the complaint. The primary basis for this dismissal was that the acquired company’s failing condition _at the time of its acquisition immunized the transaction from Section 7 challenge. The examiner also held, in the alternative, that the acquisition did not have the tendency to substantially lessen competition or to create a monopoly in any line of commerce in any section of the country. On appeal, the Commission reversed these rulings by the examiner, holding (1) that the challenged acquisition was.anticompetitive within the test of Section 7, and (2) that the failing condition of the acquired company did not exempt the acquisition. In its final order, entered December 2, 1968, the Commission directed U.S. Steel to divest itself of the acquired corporation and also enjoined it for a period of ten years from acquiring any ready-mix company without prior approval of the Commission.

Thereafter U.S. Steel filed a petition with the Court of Appeals for the Sixth Circuit to review and set aside this order. The court ruled UNITED STATES STEEL CORP.

629° Opinion that the Commission’s findings of fact with respect to the effect of the acquisition on competition we supported by substantial evidence and upheld that portion of the Commission’s decision. The court did not resolve the issue raised by the Commission’s ruling with respect to the scope of the failing company defense. It did, however, specifically reject respondent’s contention that its acquisition of Certified was completely immunized by the “failing company doctrine.” It held, in this connection, that respondent had failed to prove the “ultimate facts material to the rule of Jnternational Shoe Co. v. FT C7, 280 U.S. 291 (1930) * * *” as clarified by more recent Supreme Court decisions culminating in Citizen Publishing Company v. United States, supra. The Court of Appeals pointed out that the Citizen Publishing Company decision had held that a company claiming the failing company defense must show not only (1) “that the financial condition and resources of the [acquired] company are so dire that ‘it faced the grave probability. of a business failure’ ” and '(2) that there was “no other prospective purchaser” but also that the prospects of the acquired company emerging from reorganization as a competitive unit were “dim or non-existent.” The court further observed that U.S. Steel had failed to sustain its burden with respect to the third requirement. Since Citizen Publishing had been decided subsequent to the Commission’s disposition of the instant case, however, the court considered it appropriate “to remand this case to give U.S. Steel an opportunity to bring forth evidence that the prospects of Certified passing through bankruptcy or simliar proceedings were ‘dim or non-existent.’ ” The court also expressed the view that upon remand “the Commission should reassess the standards by which the actions and defenses of United States Steel Company are to be judged.” In this connection, the court referred to a “notes purchase agreement” between U.S. Steel and Bankers Trust Company which enabled Certified to obtain a long-term loan commitment from the latter. This agreement was entered into in January 1963, approximately 15 months before the acquisition was consummated. Relying upon the Supreme Court’s decision in Citizen Publishing Company v. United States, supra, the court held that if “vertical ties” in the form of increased cement purchases by Certified from respondent had taken an unlawful cast as of the time of the loan agreement then the failing character of Certified must be shown to have existed at that time. After remand from the court, the Commission, by order of Septem. ber 25, 1970 [77 F.T.C. 1646], reopened the proceeding and remandec it to Hearing Examiner Lewis to begin hearings, in accordance wit: the opinion of the Court of Appeals, for the purpose of receivin evidence with respect to the issues of whether: Opinion 81 FJT.C, (a) as of January 1963 the financial condition and resources of Certified Industries were so dire that it faced the grave probability of a business failure.

(b) between January 1963 and April 1964 no prospective purchaser other than United States Steel Corporation was interested in acquiring Certified.

(c) “Certified’s opportunity for some form of continued competitive vitality through bankruptcy or similar proceedings” was “dim or non-existent” either in January 1963 or in April 1964, and | (d) the U.S. Steel-Certified vertical ties did in fact take an unlawful cast as early as January 1963.

- In an initial decision filed January 14, 1972, Mr. Lewis made findings of fact with respect to only one of the above issues. He found on the basis of testimony and documentary evidence adduced by respondent, including the testimony of two experts in the field of bankruptcy and reorganization, that the prospects of Certified’s surviving through bankruptcy or similar proceedings in April 1964 were dim or nonexistent. The examiner did not, decide the question whether “the U.S. Steel-Certified vertical ties did in fact take an unlawful cast as early as January 1963,” apparently because he did not believe the court’s remand instructions on this point were correct as a matter of law. He found instead that “the record fails to establish that, prior to the acquisition, the U.S. Steel-Certified arrangement took on an unlawful cast of such a nature as to justify advancing the date for determining compliance with the requirements of the failing company defense” - (emphasis added). Having so found, he deemed it unnecessary to make any findings or conclusions with respect to the two remaining issues, (a) and (b) above.

In their appeal from the examiner’s decision counsel supporting the complaint do not contest the conclusion that Certified’s opportunity for some form of continued competitive vitality through bankruptcy or similar proceedings were dim or non-existent in April 1964. They concede that Certified was in a failing condition when it was acquired. Cheir principal argument concerns the examiner’s failure to find that he relationship between U.S. Steel and Certified was unlawful in anuary 1963 when U.S. Steel arranged the Bankers Trust loan for 'certified.

The following facts necessary to an understanding of this aspect of _ e case and of the court’s ruling with respect thereto are not in distte: By the end of 1962 Certified was in a very tight financial posin. It was still earning a profit but because of its growth and the UNITED STATES STEEL CORP. ve 629 — Opinion high volume it was generating, it had insufficient working capital for its needs, In December 1962 Certified’s management informed representatives of U.S. Steel that Certified would have difficulty in paying a $150,000 note which was due to mature on February 15, 1963. As a consequence, U.S. Steel arranged a:‘meeting between Certified and Bankers Trust Company of New York, where U.S. Steel was a depositor. After investigating Certified representatives of the Bankers Trust Company reached the conclusion that the ready-mix company had. young, aggressive management with good ideas as to how to run the company properly but that it was in need of approximately $3 million on a long term basis to refinance existing debt, provide for new equipment and furnish much needed working capital. The Bankers Trust representatives were “somewhat enthusiastic” about the possibilities and prospects in the Certified situation, but in early January 1963 they advised officials of U.S. Steel that the necessary term loan would not be “bankable” without some sort of credit support or guarantee by U.S. Steel. Realizing that the furnishing of such a guarantee would afford it the opportunity to increase sales of cement. to Certified, U.S. Steel entered into an agreement with the bank. under which it agreed to purchase notes given to the bank by Certified, up to a maximum of $3.5 million in the event such notes were not paid when due. The bank then loaned Certified $3.3 million for a period of ten years, at a rate of interest of % percent above the bank’s prime commercial loan rate. After the loan had been approved U.S. Steel submitted. to Certified a proposed supply agreement under which Certified would agree to buy not less than 65 percent of its cement requirements from respondent for a period of ten years. This agreement was not executed, but Certified increased its cement purchases from respondent from approximately 15 percent in 1962 to 53.6 percent in calendar year 1963. By November of 1963 Certified was purchasing cement from U.S. Steel at a rate that would amount to 700,000 barrels a year, equaling slightly over 65 percent of its requirements. When this matter was first before the Commission argument was made by complaint counsel that the above-mentioned loan was instrumental in inducing Certified to reject purchase offers from cement. manufacturers that were attempting to acquire it. Hence, they contended that since respondent’s financial involvement with Certified prevented: the latter from being acquired, the operative date for determining? whether Certified was in a failing condition should be January 1963. In rejecting this argument the Commission held that there was no evidence that Certified was not making a good faith effort to rehabilitate itself and that it was preferable for it to secure

UNITED STATES STEEL CORP. uUue 629 : Opinion ing effects, may well be unlawful under Section 1 of the Sherman Act. * * * To the extent that unreasonable foreclosure of Certified’s cement demands occurred as a result of the financial arrangement in January, 1963, we believe that the failing company defense must be measured from the inception of these unreasonable vertical arrangements, not from the point of their final consummation.” This position seems to us to be consistent with the rationale of Citizen Publishing in which the earlier date (of an unlawful agreement) was applied with respect to a merger which “had the effect of continuing in a more permanent form a substantial lessening of competition. * * *” In this case the court is interested in ascertaining whether there was an unlawful agreement between respondent and Certified having swbstantially the same anticompetitive effect as the subsequent acquisition. We have no doubt from our review of the record that respondent’s increased sales of cement to Certified were tied to respondent’s:guarantee of the Bankers Trust loan. First of all, we find that the arrangement here, like that in Fortner Enterprises, Inc. v. U.S. Steel Corp., 394 U.S. 495 (1969), was not the mere sale of merchandise on credit, but instead involved two separate products. Here, as in Fortner, Certified contracted “to obtain a large sum of money over and above that needed to pay the seller for the physical products purchased.” The guarantee of the loan was not inseparable from the sale of cement, ‘to Certified. Secondly, the record establishes that Certified did not wish to be acquired by another company at that time and that it had reason to believe that it could preserve its existence as an independent entity only if it could obtain long term financing in the amount of at least $3 million. It is also clear from the record that prior to receiving the Bankers Trust loan, Certified had exhausted its efforts to obtain the type of long term financing it desired and knew that it had no one to turn to except respondent. The record further shows that even under | the most optimistic view Certified could not have expected to extricate itself from its financial problems for at least three to five years. It also establishes that Certified’s financial condition continued to deteriorate even after it received the Bankers Trust loan and that it could look only to U.S. Steel for further assistance. Respondent, on the other hand, assisted Certified in obtaining the loan with the purpose of obtaining a substantial increase in its share of Certified’s cement purchases, In 1962 respondent supplied only about 15 percent of Certified’s cement requirements. It requested that its share be increased to at least 65 percent of Certified’s requirements and, by the end of 1963, Certified was purchasing respondent’s cement at that rate. These facts are by themselves persuasive evidence that Certified had obligated itself to Opinion ‘ 81 F.T.C.

purchase most of its cement requirements from respondent i in return for the latter’s assistance in obtaining financing. There is, moreover, other evidence of“ record manifesting the existence of such a relationship between respondent’s guarantee of Certified’s loans and the increased purchases of respondent’s cement by Certified. During 1963 Certified bought most of its cement requirements from respondent even though respondent was selling at the going market price, less a cash discount, and other cement companies were offering allowances over and above the cash discount.* One of the most attractive prices was offered by Triangle Cement Company in the form of a volume discount and the record discloses that Certified asked respondent to meet this price and that respondent refused to do so.t Nevertheless Certified continued to purchase most of its requirements from respondent at the higher price. We believe that these facts not only evidence the existence of a tying arrangement but also demonstrate that the restraint imposed on Certified was even more onerous than the restrictions in Jnternational Salt Co. v. United States, 332 US. 392 and Northern Pacific R. Co. v. United States, 356 U.S. 1, which gave the vendors in those matters a priority on the business of their vendees only when their prices were no higher than the prices of their competitors.® 3 Mr. KE. L. Litman, vice president and general manager of Certified Industries, testified as follows with respect to cement prices:

Q. You speak of allowances. Could you go into this in a little more detail and explain that situation? A. Cement companies, some cement companies—I don’t know which exactly—were offering allowances over and above the cash discount for the purchase of their product. Q. And this would have brought their price down lower than that that Universal Atlas would supply cement to you for? A. Yes, Sir. (Tr. 849) 4Mr. Litman testified as follows with respect t to a conversation with one of respondent’s officials, Mr. Raggio, in which he requested respondent to meet Triangle’s price: Q. What was your main purpose in discussing this issue with Mr. Raggio? Were you hoping he would match this discount ? :

A. I think so.

* * * * * * . * Q. What did Mr. Raggio tell you about meeting this discount? A. I don’t recall exactly what he told me, but I believe he would have taken it under consideration.

Q. Well, did he? Did you get a reduction in price? A. No, Sir. ‘ Q. Did you make any change in your buying policy after Mr. Raggio refused you this discount? A. No, Sir. At least not as I recall and not related to this conversation. (Tr. 856-857) 5This type of evidence would have satisfied even the dissenting justice in Northern Pacific R. Co. v. United States, supra, at 16-17 : “I do not deny that there may be instances where economic coercion by a vendor may be inferred, without any direct showing of market dominance, from the mere existence of tying arrangements. themselves, as where the vendee is apt to suffer economic detriment from a tying clause because precluded from purchasing a tied product at better terms or of a better quality elsewhere.” UNITED STATES STEEL CORP. voy 629 Opinion2 1 2 0 0 0 565 308 1336 1928 -1 3 1 2 1 0 0 577 308 1324 794 -1 4 1 2 1 1 0 622 308 1278 47 -1 5 1 2 1 1 1 622 311 63 32 96.954506 We5 1 2 1 1 2 706 311 137 32 96.637489 furthers 1 2 1 1 3 855 304 76 56 96.469482 finds 1 2 1 1 4 954 314 75 30 96.375008 that5 1 2 1 1 5 1051 314 56 31 96.277100 thes 1 2 1 1 6 1129 308 181 47 96.277100 foregoing5 1 2 1 1 7 1329 314 142 32 96.467781 vertical5 1 2 1 1 8 1492 309 240 46 95.963951 arrangements 1 2 1 1 9 1739 316 161 31 96.772743 between4 1 2 1 2 0 581 356 1320 54 -1 5 1 2 1 2 1 581 362 206 39 96.775215 respondents 1 2 1 2 2 805 363 67 32 96.825027 ands 1 2 1 2 3 892 362 172 42 96.760063 Certified,5 1 2 1 2 4 1084 356 207 50 96.575020 foreclosing5 1 2 1 2 5 1308 375 37 21 96.801964 as5 1 2 1 2 6 1357 365 34 45 94.145821 it5 1 2 1 2 7 1407 364 61 32 96.484863 did5 1 2 1 2 8 1486 375 20 21 96.831093 a5 1 2 1 2 9 1522 365 205 32 96.597687 substantial5 1 2 1 2 10 1744 360 100 38 96.908363 shares 1 2 1 2 11 1861 366 40 31 96.945007 of4 1 2 1 3 0 580 411 1321 46 -1 5 1 2 1 3 1 580 411 58 32 96.727783 thes 1 2 1 3 2 664 412 82 31 96.959793 News 1 2 1 3 3 772 413 96 31 96.729202 Yorks 1 2 1 3 4 891 414 134 32 96.324631 markets 1 2 1 3 5 1049 415 57 31 96.529228 for5 1 2 1 3 6 1130 414 160 41 96.603600 portland5 1 2 1 3 7 1315 419 139 36 96.558342 cement,5 1 2 1 3 8 1478 415 69 32 95.696594 had5 1 2 1 3 9 1571 426 43 20 96.878273 an5 1 2 1 3 10 1639 416 140 41 95.054916 adverse5 1 2 1 3 11 1800 412 101 36 96.345940 effect4 1 2 1 4 0 580 457 1319 49 -1 5 1 2 1 4 1 580 472 44 20 96.504974 on5 1 2 1 4 2 637 457 234 46 96.185211 competitions 1 2 1 4 3 895 464 37 31 96.964333 in5 1 2 1 4 4 955 465 70 32 96.903458 this5 1 2 1 4 5 1048 465 133 32 95.764679 markets 1 2 1 4 6 1204 466 217 40 96.394699 comparable5 1 2 1 4 7 1444 469 38 28 96.685654 to5 1 2 1 4 8 1504 466 77 31 94.641273 that5 1 2 1 4 9 1605 467 110 31 94.641273 which5 1 2 1 4 10 1741 474 50 24 96.651207 we5 1 2 1 4 11 1813 467 86 32 96.499420 have4 1 2 1 5 0 581 510 1317 47 -1 5 1 2 1 5 1 581 512 139 41 96.432671 already5 1 2 1 5 2 747 513 109 32 96.151680 found5 1 2 1 5 3 882 510 148 37 96.174080 resulted5 1 2 1 5 4 1055 515 91 32 96.174080 from5 1 2 1 5 5 1169 516 59 32 96.316956 thes 1 2 1 5 6 1252 516 156 32 96.582268 eventual5 1 2 1 5 7 1435 515 204 42 96.905693 acquisitions 1 2 1 5 8 1662 516 40 32 96.437584 of5 1 2 1 5 9 1725 517 173 33 94.614044 Certified.4 1 2 1 6 0 580 558 1320 50 -1 5 1 2 1 6 1 580 563 37 30 95.498848 It5 1 2 1 6 2 637 563 30 30 95.498848 is5 1 2 1 6 3 687 558 233 47 96.637024 unnecessary,5 1 2 1 6 4 940 566 166 40 96.746712 however,5 1 2 1 6 5 1126 569 35 30 96.324554 to5 1 2 1 6 6 1183 566 103 41 96.324554 again5 1 2 1 6 7 1307 567 142 41 96.400642 analyzes 1 2 1 6 8 1468 566 59 31 96.981903 thes 1 2 1 6 9 1546 562 221 46 96.368736 competitive5 1 2 1 6 10 1785 567 115 32 96.627060 effects4 1 2 1 7 0 578 613 1321 45 -1 5 1 2 1 7 1 578 613 39 31 96.364662 of5 1 2 1 7 2 635 614 57 30 96.364662 thes 1 2 1 7 3 710 614 218 33 96.352615 foreclosure.5 1 2 1 7 4 947 615 101 33 96.956192 Since5 1 2 1 7 5 1063 628 50 20 96.979950 we5 1 2 1 7 6 1129 617 71 32 96.944099 finds 1 2 1 7 7 1216 617 78 32 96.385902 that5 1 2 1 7 8 1309 617 208 41 96.416260 respondents 1 2 1 7 9 1531 618 187 40 96.578651 compelled5 1 2 1 7 10 1735 617 164 33 96.543823 Certified4 1 2 1 8 0 579 664 1320 43 -1 5 1 2 1 8 1 579 667 35 28 95.130936 to5 1 2 1 8 2 634 664 69 40 93.286285 buys 1 2 1 8 3 724 665 232 40 92.532677 respondent’s5 1 2 1 8 4 974 670 129 28 96.407852 cements 1 2 1 8 5 1121 667 35 31 96.386765 in5 1 2 1 8 6 1177 667 102 31 96.550156 orders 1 2 1 8 7 1295 671 37 28 96.176575 to5 1 2 1 8 8 1350 666 118 33 93.300995 obtains 1 2 1 8 9 1487 668 234 39 92.078857 respondent’s5 1 2 1 8 10 1738 668 161 32 96.681427 financial4 1 2 1 9 0 578 714 1322 45 -1 5 1 2 1 9 1 578 714 183 32 96.749146 assistance5 1 2 1 9 2 782 716 69 32 96.767120 ands 1 2 1 9 3 870 716 77 32 96.729309 that5 1 2 1 9 4 967 717 56 32 96.271027 thes 1 2 1 9 5 1045 722 239 37 96.232384 arrangements 1 2 1 9 6 1304 728 70 22 96.589859 was5 1 2 1 9 7 1393 718 175 31 96.629303 therefore5 1 2 1 9 8 1585 718 36 31 96.975037 in5 1 2 1 9 9 1640 718 60 32 96.306503 thes 1 2 1 9 10 1718 722 124 29 96.535469 nature5 1 2 1 9 11 1861 719 39 31 96.829567 of4 1 2 1 10 0 580 764 1318 46 -1 5 1 2 1 10 1 580 776 20 20 96.395592 a5 1 2 1 10 2 619 764 109 41 96.395592 tie-in,5 1 2 1 10 3 746 765 29 32 96.496262 it5 1 2 1 10 4 791 766 30 31 96.691597 is5 1 2 1 10 5 838 767 134 42 96.804871 enough5 1 2 1 10 6 989 771 36 28 96.995369 to5 1 2 1 10 7 1042 767 73 33 96.478134 finds 1 2 1 10 8 1132 769 76 31 96.478134 that5 1 2 1 10 9 1225 779 20 21 96.776695 a5 1 2 1 10 10 1261 771 61 29 96.659340 not5 1 2 1 10 11 1339 768 242 32 96.206627 insubstantial5 1 2 1 10 12 1600 769 137 41 96.693985 portions 1 2 1 10 13 1754 769 40 32 93.234207 of5 1 2 1 10 14 1811 780 87 21 92.294075 com-4 1 2 1 11 0 578 816 1320 44 -1 5 1 2 1 11 1 578 825 110 21 96.705200 merce5 1 2 1 11 2 705 826 68 22 96.361015 was5 1 2 1 11 3 792 816 152 33 95.812210 affected.5 1 2 1 11 4 962 819 157 31 96.383881 Atlantic5 1 2 1 11 5 1135 819 160 41 96.657143 Refining5 1 2 1 11 6 1315 819 58 32 92.810478 Co.5 1 2 1 11 7 1391 830 30 20 92.810478 v.5 1 2 1 11 8 1438 819 150 32 93.044037 Federal5 1 2 1 11 9 1604 820 111 31 92.837677 Trades 1 2 1 11 10 1734 820 164 32 87.760986 Commis-4 1 2 1 12 0 577 866 1321 49 -1 5 1 2 1 12 1 577 866 87 39 96.267441 sion,5 1 2 1 12 2 682 867 58 30 82.065269 3815 1 2 1 12 3 757 866 82 34 95.087082 U.S.5 1 2 1 12 4 856 867 61 33 90.746201 3575 1 2 1 12 5 939 868 132 42 96.127182 (1965),5 1 2 1 12 6 1086 869 146 31 60.830662 Federal5 1 2 1 12 7 1249 869 111 32 96.359100 Trades 1 2 1 12 8 1377 869 228 32 93.198540 Commissions 1 2 1 12 9 1618 880 31 21 91.025520 v.5 1 2 1 12 10 1663 870 132 45 96.743744 Brown5 1 2 1 12 11 1807 869 91 34 96.177597 Shoe4 1 2 1 13 0 578 916 1320 44 -1 5 1 2 1 13 1 578 916 189 41 93.293892 Company,5 1 2 1 13 2 784 917 85 40 89.501091 Inc.,5 1 2 1 13 3 887 920 62 29 83.615326 3845 1 2 1 13 4 966 918 82 33 95.126938 U.S.5 1 2 1 13 5 1067 920 60 31 95.611389 3165 1 2 1 13 6 1152 919 131 41 96.140152 (1966).5 1 2 1 13 7 1302 920 75 31 96.542770 Thes 1 2 1 13 8 1393 919 143 32 96.413597 vertical5 1 2 1 13 9 1555 919 209 34 89.687340 foreclosure5 1 2 1 13 10 1779 920 119 33 89.687340 result-4 1 2 1 14 0 577 966 1321 44 -1 5 1 2 1 14 1 577 966 62 42 96.725739 ings 1 2 1 14 2 654 966 90 32 95.642670 from5 1 2 1 14 3 758 968 58 31 96.952499 thes 1 2 1 14 4 830 973 240 37 96.827187 arrangements 1 2 1 14 5 1083 970 182 31 96.606956 amounted5 1 2 1 14 6 1279 974 34 29 96.893837 to5 1 2 1 14 7 1327 970 190 39 96.750160 $1,675,0005 1 2 1 14 8 1529 969 36 32 96.625511 in5 1 2 1 14 9 1580 972 81 30 96.394508 19635 1 2 1 14 10 1675 971 98 31 96.972145 alone5 1 2 1 14 11 1787 971 111 31 96.552872 which4 1 2 1 15 0 578 1016 1321 46 -1 5 1 2 1 15 1 578 1016 58 31 96.605049 far5 1 2 1 15 2 654 1018 138 31 96.378342 exceeds5 1 2 1 15 3 809 1018 58 32 96.378342 thes 1 2 1 15 4 886 1024 157 27 96.700012 amounts5 1 2 1 15 5 1061 1020 137 31 96.309547 deemed5 1 2 1 15 6 1217 1019 81 33 96.797127 “not5 1 2 1 15 7 1315 1019 265 33 96.414688 insubstantial”5 1 2 1 15 8 1597 1020 45 42 96.866371 by5 1 2 1 15 9 1660 1021 59 32 96.450172 thes 1 2 1 15 10 1736 1020 109 34 96.101227 Courts 1 2 1 15 11 1862 1022 37 31 95.789001 in4 1 2 1 16 0 578 1068 612 34 -1 5 1 2 1 16 1 578 1068 251 32 40.823631 International5 1 2 1 16 2 838 1069 78 32 94.808014 Salts 1 2 1 16 3 929 1070 68 31 93.275017 ands 1 2 1 16 4 1009 1071 157 31 75.995514 Fortner.5 1 2 1 16 5 1188 1085 2 2 2.370140 °3 1 2 2 0 0 573 1118 1327 747 -1 4 1 2 2 1 0 619 1118 1279 45 -1 5 1 2 2 1 1 619 1118 49 31 96.891403 As5 1 2 2 1 2 684 1118 110 32 96.450310 stated5 1 2 2 1 3 811 1119 114 40 96.791176 above,5 1 2 2 1 4 940 1120 58 32 96.722588 thes 1 2 2 1 5 1013 1121 144 41 96.608444 hearings 1 2 2 1 6 1172 1120 174 32 96.246124 examiners 1 2 2 1 7 1360 1120 61 32 96.246124 did5 1 2 2 1 8 1435 1124 61 28 95.865997 not5 1 2 2 1 9 1510 1121 100 32 96.778625 makes 1 2 2 1 10 1624 1132 67 31 96.574265 any5 1 2 2 1 11 1705 1121 137 42 96.048759 findings 1 2 2 1 12 1854 1133 44 21 96.147812 on4 1 2 2 2 0 576 1167 1323 45 -1 5 1 2 2 2 1 576 1167 87 32 96.731209 issues 1 2 2 2 2 691 1168 52 41 96.611511 (a)5 1 2 2 2 3 770 1169 39 31 95.890953 of5 1 2 2 2 4 829 1169 58 31 96.264076 thes 1 2 2 2 5 907 1170 140 32 96.264076 remand5 1 2 2 2 6 1067 1171 110 39 93.208885 order,5 1 2 2 2 7 1196 1172 63 39 11.847038 .e.,5 1 2 2 2 8 1278 1171 154 32 95.438042 whether5 1 2 2 2 9 1451 1181 36 22 95.438042 as5 1 2 2 2 10 1505 1171 39 32 96.823975 of5 1 2 2 2 11 1563 1172 157 40 96.282738 January5 1 2 2 2 12 1741 1174 81 30 96.551514 19635 1 2 2 2 13 1840 1172 59 32 96.864479 thea 1 2 2 3 0 576 1217 1324 39 -1 5 1 2 2 3 1 576 1217 159 32 96.786499 financial5 1 2 2 3 2 754 1219 176 32 95.806793 conditions 1 2 2 3 3 949 1220 68 32 96.737129 ands 1 2 2 3 4 1036 1231 169 22 96.904251 resources5 1 2 2 3 5 1221 1221 39 32 96.894432 of5 1 2 2 3 6 1277 1220 163 34 96.311157 Certified5 1 2 2 3 7 1459 1221 193 32 96.477509 Industries5 1 2 2 3 8 1668 1233 88 21 96.292084 were5 1 2 2 3 9 1771 1233 38 21 95.605545 so5 1 2 2 3 10 1824 1222 76 34 95.605545 dire4 1 2 2 4 0 576 1263 1322 50 -1 5 1 2 2 4 1 576 1268 75 31 96.686958 that5 1 2 2 4 2 669 1268 28 31 96.686958 it5 1 2 2 4 3 715 1263 98 38 96.979965 faced5 1 2 2 4 4 831 1270 58 31 96.441803 thes 1 2 2 4 5 904 1281 106 30 96.658562 graves 1 2 2 4 6 1026 1271 210 41 96.746780 probability5 1 2 2 4 7 1252 1271 39 32 96.936134 of5 1 2 2 4 8 1307 1283 22 20 96.908463 a5 1 2 2 4 9 1343 1271 153 32 93.306007 business5 1 2 2 4 10 1512 1271 149 32 86.715302 failure.*5 1 2 2 4 11 1678 1272 220 41 96.788589 Respondent4 1 2 2 5 0 574 1317 1324 46 -1 5 1 2 2 5 1 574 1317 79 32 96.127831 does5 1 2 2 5 2 678 1322 59 28 96.127831 not5 1 2 2 5 3 762 1319 111 40 95.896645 claim,5 1 2 2 5 4 898 1320 166 40 96.328430 however,5 1 2 2 5 5 1088 1322 75 31 95.686119 that5 1 2 2 5 6 1189 1321 162 33 95.686119 Certified5 1 2 2 5 7 1375 1332 71 21 95.269615 was5 1 2 2 5 8 1468 1321 35 32 95.269615 in5 1 2 2 5 9 1528 1332 22 21 95.358215 a5 1 2 2 5 10 1572 1322 128 41 95.358215 failing5 1 2 2 5 11 1723 1322 175 33 96.072563 condition4 1 2 2 6 0 575 1369 1322 44 -1 5 1 2 2 6 1 575 1379 37 21 96.792236 as5 1 2 2 6 2 631 1369 40 31 96.783348 of5 1 2 2 6 3 689 1369 69 32 96.963760 this5 1 2 2 6 4 777 1370 124 31 96.113884 earlier5 1 2 2 6 5 916 1371 90 32 96.731529 date.5 1 2 2 6 6 1027 1372 35 31 96.848740 It5 1 2 2 6 7 1081 1372 99 31 96.443108 made5 1 2 2 6 8 1198 1383 46 21 95.927071 no5 1 2 2 6 9 1261 1375 148 38 95.927071 attempts 1 2 2 6 10 1426 1376 37 28 95.971611 to5 1 2 2 6 11 1480 1371 178 33 96.569099 introduces 1 2 2 6 12 1676 1373 161 32 96.775238 evidences 1 2 2 6 13 1854 1377 43 27 96.775490 on4 1 2 2 7 0 574 1419 1325 45 -1 5 1 2 2 7 1 574 1419 70 31 96.097618 this5 1 2 2 7 2 666 1419 87 32 96.865181 issues 1 2 2 7 3 773 1431 64 21 96.703079 nor5 1 2 2 7 4 857 1421 60 31 96.801033 did5 1 2 2 7 5 939 1422 29 30 96.932533 it5 1 2 2 7 6 987 1422 80 31 96.484116 takes 1 2 2 7 7 1087 1422 177 40 96.592979 exceptions 1 2 2 7 8 1284 1426 38 27 96.172218 to5 1 2 2 7 9 1340 1422 59 31 93.282524 thes 1 2 2 7 10 1417 1422 202 32 92.653427 examiner’s5 1 2 2 7 11 1638 1423 116 41 86.970383 rulings 1 2 2 7 12 1766 1423 81 32 86.970383 that5 1 2 2 7 13 1870 1424 29 31 95.852592 it4 1 2 2 8 0 575 1470 1322 45 -1 5 1 2 2 8 1 575 1480 69 20 96.570007 was5 1 2 2 8 2 661 1473 59 28 96.570007 not5 1 2 2 8 3 737 1470 156 40 96.435623 required5 1 2 2 8 4 909 1475 37 28 96.754539 to5 1 2 2 8 5 961 1473 44 30 96.872772 do5 1 2 2 8 6 1022 1482 37 21 95.786201 so5 1 2 2 8 7 1077 1473 111 30 96.961052 unless5 1 2 2 8 8 1204 1473 30 30 96.904358 it5 1 2 2 8 9 1249 1484 88 20 96.781013 were5 1 2 2 8 10 1351 1473 206 31 96.347893 established5 1 2 2 8 11 1572 1473 79 32 96.442513 that5 1 2 2 8 12 1664 1474 60 32 96.367676 thes 1 2 2 8 13 1739 1474 158 41 96.560822 January4 1 2 2 9 0 574 1521 1324 43 -1 5 1 2 2 9 1 574 1521 81 30 91.229584 19635 1 2 2 9 2 682 1525 332 36 93.538620 arrangements 1 2 2 9 3 944 1517 64 51 94.859253 was5 1 2 2 9 4 1038 1521 126 42 93.508492 illegal.5 1 2 2 9 5 1191 1524 222 39 96.207245 Respondents 1 2 2 9 6 1436 1523 207 41 96.685211 specifically5 1 2 2 9 7 1666 1527 104 29 96.460121 states5 1 2 2 9 8 1793 1524 36 31 94.749527 in5 1 2 2 9 9 1853 1524 45 32 94.749527 its4 1 2 2 10 0 573 1570 1325 43 -1 5 1 2 2 10 1 573 1570 168 39 96.699753 proposed5 1 2 2 10 2 768 1571 152 42 95.605324 findings5 1 2 2 10 3 944 1572 78 31 96.566666 that5 1 2 2 10 4 1048 1572 241 41 96.729698 “Respondents 1 2 2 10 5 1315 1574 81 31 95.601288 does5 1 2 2 10 6 1420 1578 61 26 95.601288 not5 1 2 2 10 7 1506 1573 102 32 95.969696 claims 1 2 2 10 8 1633 1574 77 31 95.417694 that5 1 2 2 10 9 1735 1574 163 33 95.417694 Certified4 1 2 2 11 0 574 1620 1322 45 -1 5 1 2 2 11 1 574 1630 68 20 95.829765 was5 1 2 2 11 2 661 1632 19 19 95.091515 a5 1 2 2 11 3 702 1620 128 42 95.946335 failing5 1 2 2 11 4 847 1632 167 31 96.749939 company5 1 2 2 11 5 1033 1633 37 21 95.251419 as5 1 2 2 11 6 1088 1623 38 31 95.251419 of5 1 2 2 11 7 1144 1623 158 41 96.075333 January5 1 2 2 11 8 1321 1625 82 29 93.254440 19635 1 2 2 11 9 1427 1623 57 41 91.006790 (R.5 1 2 2 11 10 1504 1625 91 38 96.919518 1282,5 1 2 2 11 11 1615 1624 114 41 92.170731 1643).5 1 2 2 11 12 1748 1625 148 31 91.611092 Accord-4 1 2 2 12 0 574 1670 1323 45 -1 5 1 2 2 12 1 574 1670 107 40 95.779655 ingly,5 1 2 2 12 2 697 1671 59 31 96.975456 thes 1 2 2 12 3 772 1671 158 33 96.524895 evidences 1 2 2 12 4 946 1673 28 31 96.388412 it5 1 2 2 12 5 990 1674 128 30 96.405846 offered5 1 2 2 12 6 1134 1684 42 21 96.565628 on5 1 2 2 12 7 1195 1674 141 31 96.475182 remand5 1 2 2 12 8 1353 1684 68 20 96.475182 was5 1 2 2 12 9 1438 1674 181 31 96.638641 addressed5 1 2 2 12 10 1636 1674 106 41 95.882637 solely5 1 2 2 12 11 1758 1678 36 28 96.984055 to5 1 2 2 12 12 1810 1674 87 33 96.528145 issue4 1 2 2 13 0 578 1720 1319 46 -1 5 1 2 2 13 1 578 1720 50 41 87.775543 (c)5 1 2 2 13 2 658 1722 67 30 96.189949 ands 1 2 2 13 3 748 1722 79 40 96.384155 only5 1 2 2 13 4 848 1726 38 27 93.270760 to5 1 2 2 13 5 907 1722 190 44 92.287163 Certified’s5 1 2 2 13 6 1118 1723 229 41 96.195190 opportunity5 1 2 2 13 7 1368 1723 60 32 96.195190 for5 1 2 2 13 8 1447 1724 153 31 96.360840 survival5 1 2 2 13 9 1620 1724 152 41 93.284309 through5 1 2 2 13 10 1792 1725 105 31 93.156372 bank-4 1 2 2 14 0 574 1773 1323 42 -1 5 1 2 2 14 1 574 1774 121 38 59.467201 ruptey5 1 2 2 14 2 722 1782 39 21 95.736084 or5 1 2 2 14 3 786 1773 133 31 95.736084 similar5 1 2 2 14 4 943 1773 221 41 96.369926 proceedings5 1 2 2 14 5 1190 1774 91 31 95.939781 from5 1 2 2 14 6 1306 1775 59 31 96.497955 thes 1 2 2 14 7 1390 1773 78 32 96.278816 dates 1 2 2 14 8 1492 1773 40 33 96.661034 of5 1 2 2 14 9 1555 1774 46 32 96.136864 its5 1 2 2 14 10 1625 1774 203 41 96.563507 acquisitions 1 2 2 14 11 1853 1785 44 21 96.680244 on4 1 2 2 15 0 574 1821 1324 44 -1 5 1 2 2 15 1 574 1821 104 39 96.714630 April5 1 2 2 15 2 697 1824 50 37 93.721756 80,5 1 2 2 15 3 765 1824 90 30 90.822891 1964.5 1 2 2 15 4 876 1823 15 17 90.518120 *5 1 2 2 15 5 912 1823 16 17 90.518120 *5 1 2 2 15 6 949 1824 38 16 81.671043 *”5 1 2 2 15 7 1011 1824 188 41 96.230721 (Findings5 1 2 2 15 8 1215 1824 38 31 96.230721 of5 1 2 2 15 9 1270 1824 87 32 96.271347 Facts 1 2 2 15 10 1374 1824 68 31 96.548424 ands 1 2 2 15 11 1459 1824 223 33 96.230576 Conclusions5 1 2 2 15 12 1699 1825 39 32 96.604706 of5 1 2 2 15 13 1754 1826 83 31 95.978043 Laws 1 2 2 15 14 1853 1836 45 21 96.771980 on3 1 2 3 0 0 572 1872 1326 94 -1 4 1 2 3 1 0 591 1872 1307 44 -1 5 1 2 3 1 1 591 1872 138 31 60.372883 Remand5 1 2 3 1 2 759 1873 172 40 95.913818 Proposed5 1 2 3 1 3 960 1874 45 41 95.792915 by5 1 2 3 1 4 1033 1874 230 41 96.167336 Respondent,5 1 2 3 1 5 1291 1885 89 30 95.331680 pages 1 2 3 1 6 1407 1875 35 40 95.331680 3)5 1 2 3 1 7 1476 1874 246 42 96.224411 Accordingly,5 1 2 3 1 8 1750 1886 49 21 96.572296 we5 1 2 3 1 9 1825 1875 73 32 96.835678 find4 1 2 3 2 0 572 1922 1325 44 -1 5 1 2 3 2 1 572 1922 77 31 96.318916 that5 1 2 3 2 2 663 1923 57 31 96.961121 thes 1 2 3 2 3 734 1924 118 30 96.318184 records 1 2 3 2 4 867 1923 81 33 96.329887 does5 1 2 3 2 5 960 1928 59 28 96.894073 not5 1 2 3 2 6 1033 1924 162 32 96.324463 establish5 1 2 3 2 7 1207 1925 79 31 96.745453 that5 1 2 3 2 8 1298 1936 36 21 96.270844 as5 1 2 3 2 9 1348 1925 39 31 96.129074 of5 1 2 3 2 10 1426 1935 131 31 96.372101 January5 1 2 3 2 11 1571 1927 81 30 79.155624 19685 1 2 3 2 12 1665 1926 59 31 96.890991 thes 1 2 3 2 13 1736 1925 161 33 96.667290 financial3 1 2 4 0 0 565 2007 1330 229 -1 4 1 2 4 1 0 605 2007 1290 27 -1 5 1 2 4 1 1 605 2007 10 12 5.750931 °5 1 2 4 1 2 625 2007 52 20 5.750931 Thes 1 2 4 1 3 692 2007 128 22 96.521004 examiners 1 2 4 1 4 835 2009 121 20 96.065300 reasoned5 1 2 4 1 5 972 2009 59 20 96.782944 that5 1 2 4 1 6 1045 2010 31 19 96.042313 he5 1 2 4 1 7 1090 2014 52 15 96.042313 was5 1 2 4 1 8 1157 2010 115 24 95.460922 required5 1 2 4 1 9 1288 2011 26 19 95.960068 to5 1 2 4 1 10 1329 2010 98 20 96.588852 receives 1 2 4 1 11 1440 2010 117 21 96.624496 evidences 1 2 4 1 12 1572 2016 32 15 92.961334 on5 1 2 4 1 13 1619 2010 142 22 76.614021 Certified’s5 1 2 4 1 14 1774 2010 121 22 94.682579 financial4 1 2 4 2 0 573 2040 1321 28 -1 5 1 2 4 2 1 573 2040 128 21 96.417801 conditions 1 2 4 2 2 718 2041 25 20 96.629074 in5 1 2 4 2 3 758 2041 115 26 94.759338 January5 1 2 4 2 4 889 2043 65 20 96.289986 19635 1 2 4 2 5 968 2043 51 20 95.010811 ands 1 2 4 2 6 1033 2044 28 19 95.010811 to5 1 2 4 2 7 1075 2043 71 20 96.060699 makes 1 2 4 2 8 1161 2043 110 25 96.415909 findings5 1 2 4 2 9 1285 2043 63 21 96.418404 with5 1 2 4 2 10 1363 2045 100 23 96.494942 respects 1 2 4 2 11 1477 2044 100 20 96.442474 thereto5 1 2 4 2 12 1591 2045 58 23 96.256828 only5 1 2 4 2 13 1664 2044 23 21 95.776855 if5 1 2 4 2 14 1699 2045 31 20 96.048073 he5 1 2 4 2 15 1744 2045 57 20 96.106026 firsts 1 2 4 2 16 1813 2045 81 20 96.192726 found4 1 2 4 3 0 573 2074 1322 27 -1 5 1 2 4 3 1 573 2074 59 21 96.356262 that5 1 2 4 3 2 652 2074 43 21 96.549667 thes 1 2 4 3 3 715 2076 178 23 96.468208 arrangements 1 2 4 3 4 912 2076 112 21 96.418404 between5 1 2 4 3 5 1045 2077 154 24 96.054710 respondents 1 2 4 3 6 1218 2077 50 20 95.805374 ands 1 2 4 3 7 1288 2076 121 21 95.805374 Certified5 1 2 4 3 8 1428 2077 48 21 96.413467 had5 1 2 4 3 9 1497 2077 76 21 95.273994 taken5 1 2 4 3 10 1594 2083 32 15 96.693710 an5 1 2 4 3 11 1646 2078 126 20 96.031418 unlawful5 1 2 4 3 12 1791 2079 56 20 95.113228 casts 1 2 4 3 13 1866 2083 29 15 95.113228 as4 1 2 4 4 0 572 2107 1323 27 -1 5 1 2 4 4 1 572 2107 71 24 96.130028 early5 1 2 4 4 2 658 2112 28 16 96.312523 as5 1 2 4 4 3 700 2108 116 25 96.188606 January5 1 2 4 4 4 832 2109 70 21 92.595383 1963.5 1 2 4 4 5 918 2109 62 21 96.398857 This5 1 2 4 4 6 996 2110 142 24 96.018608 reasoning,5 1 2 4 4 7 1153 2111 122 22 96.256477 however,5 1 2 4 4 8 1291 2110 85 21 96.653915 leaves5 1 2 4 4 9 1391 2111 73 20 96.852585 much5 1 2 4 4 10 1480 2111 26 20 95.889137 to5 1 2 4 4 11 1522 2111 28 20 96.519974 be5 1 2 4 4 12 1564 2111 106 21 96.067627 desired.5 1 2 4 4 13 1685 2112 26 20 96.414291 It5 1 2 4 4 14 1725 2112 90 21 92.790405 should5 1 2 4 4 15 1830 2112 65 20 96.620834 have4 1 2 4 5 0 572 2142 1321 28 -1 5 1 2 4 5 1 572 2142 120 19 94.150223 occurred5 1 2 4 5 2 707 2143 26 19 95.373245 to5 1 2 4 5 3 748 2142 51 21 95.373245 him5 1 2 4 5 4 816 2142 58 21 96.294983 that5 1 2 4 5 5 889 2148 62 16 96.396248 even5 1 2 4 5 6 965 2143 22 21 96.208443 if5 1 2 4 5 7 1001 2143 32 21 96.575912 he5 1 2 4 5 8 1048 2144 48 20 96.216209 had5 1 2 4 5 9 1111 2145 79 19 93.709229 found5 1 2 4 5 10 1207 2149 31 15 94.764252 no5 1 2 4 5 11 1254 2144 125 24 94.764252 illegality5 1 2 4 5 12 1396 2144 25 20 95.714645 in5 1 2 4 5 13 1437 2145 43 19 96.904007 thes 1 2 4 5 14 1495 2145 115 23 95.504715 January5 1 2 4 5 15 1627 2145 64 21 95.858589 19635 1 2 4 5 16 1705 2147 188 23 96.091530 arrangement,4 1 2 4 6 0 565 2175 1328 28 -1 5 1 2 4 6 1 565 2175 60 20 88.384468 .this5 1 2 4 6 2 640 2175 95 25 96.644646 findings 1 2 4 6 3 748 2176 74 20 86.037178 could5 1 2 4 6 4 836 2177 65 20 96.527367 have5 1 2 4 6 5 916 2177 60 20 95.918198 been5 1 2 4 6 6 991 2178 40 19 96.038673 sets 1 2 4 6 7 1045 2178 70 20 96.283173 aside5 1 2 4 6 8 1129 2178 29 24 96.910599 by5 1 2 4 6 9 1174 2178 43 19 96.963226 thes 1 2 4 6 10 1231 2178 167 20 95.722656 Commissions 1 2 4 6 11 1413 2183 32 14 96.673775 on5 1 2 4 6 12 1459 2178 91 20 96.487312 reviews 1 2 4 6 13 1564 2183 29 15 96.405029 or5 1 2 4 6 14 1606 2179 90 24 95.950661 appeals 1 2 4 6 15 1711 2179 27 20 96.555328 of5 1 2 4 6 16 1752 2179 43 21 96.455765 thes 1 2 4 6 17 1808 2178 85 22 95.992920 initial4 1 2 4 7 0 573 2208 1322 28 -1 5 1 2 4 7 1 573 2208 118 21 94.544334 decision.5 1 2 4 7 2 715 2209 138 25 95.609940 Certainly,5 1 2 4 7 3 877 2210 21 20 95.609940 it5 1 2 4 7 4 919 2211 91 20 95.750320 should5 1 2 4 7 5 1033 2211 30 21 96.376617 be5 1 2 4 7 6 1084 2216 170 20 96.235039 unnecessary5 1 2 4 7 7 1277 2212 28 20 96.235039 to5 1 2 4 7 8 1327 2211 101 20 31.678436 includes 1 2 4 7 9 1449 2212 26 19 95.652626 in5 1 2 4 7 10 1497 2217 15 15 94.036194 a5 1 2 4 7 11 1534 2212 104 20 90.689796 remand5 1 2 4 7 12 1661 2211 111 22 70.007599 order.a5 1 2 4 7 13 1793 2212 102 24 95.247551 specific2 1 3 0 0 0 571 2242 1321 29 -1 3 1 3 1 0 0 571 2242 1321 29 -1 4 1 3 1 1 0 571 2242 1321 29 -1 5 1 3 1 1 1 571 2242 126 21 96.061760 reminders 1 3 1 1 2 713 2244 26 19 96.061760 to5 1 3 1 1 3 756 2244 44 21 96.690109 thes 1 3 1 1 4 816 2244 129 21 96.436760 examiners 1 3 1 1 5 961 2245 59 20 96.100853 that5 1 3 1 1 6 1036 2244 31 22 96.607193 he5 1 3 1 1 7 1081 2244 22 21 96.426079 is5 1 3 1 1 8 1120 2245 94 24 96.163269 merely5 1 3 1 1 9 1228 2245 139 24 96.209557 rendering5 1 3 1 1 10 1381 2249 34 15 96.262650 an5 1 3 1 1 11 1431 2244 87 21 96.262650 initials 1 3 1 1 12 1534 2245 119 26 96.350250 decision,5 1 3 1 1 13 1671 2247 44 19 95.955589 not5 1 3 1 1 14 1731 2251 15 15 95.469620 a5 1 3 1 1 15 1762 2245 60 21 95.469620 final5 1 3 1 1 16 1838 2250 54 16 95.553261 one.2 1 4 0 0 0 901 2288 7 8 -1 3 1 4 1 0 0 901 2288 7 8 -1 4 1 4 1 1 0 901 2288 7 8 -1 5 1 4 1 1 1 901 2288 7 8 71.214096 ° 660 FEDERAL. TRADE COMMISSION DECISIONS Order on Remand 81 F.T.C.

condition and resources of Certified Industries were so dire that it faced the grave probability of a business failure.’ To the extent indicated herein, the appeal of complaint counsel is granted. The initial decision following remand will be modified to conform with this opinion and, as so modified, will be adopted as the decision of the Commission. The Commission’s findings and conclusions will be filed with the Court of Appeals for the Sixth Circuit. Orver oN REMAND This matter having been heard by the Commission upon the appeal of counsel supporting the complaint from the hearing examinev’s initial decision following the remand of the case by the United States Court of Appeals for the Sixth Circuit; and . The Commission having determined for the reasons set forth in the accompanying opinion that the appeal of counsel supporting the complaint should be granted in part and that the initial decision following remand should be modified to conform with the views set forth in the opinion:

It is ordered, That the initial decision following remand be modified by striking therefrom findings 16 through 26, beginning on page 17 and ending on page 22, and.conclusions 1 through 38 on page 23, and substituting therefor the findings and conclusions contained in the accompanying opinion.

It is further ordered, That the findings and conclusions contained in the initial decision following remand, as so modified, be, and they hereby are, adopted as the decision of the Commission. It is further ordered, That the General Counsel be, and he hereby is, directed to file said findings and conclusions with the United States Court of Appeals for the Sixth Circuit.

Commissioner Kirkpatrick filed a concurring opinion. Commissioner Dennison dissented and filed an opinion. Commissioner Mac- Intyre did not participate.

7 The record shows that Certified had earned a profit in each year of its existence. In the fiscal year ending June 30, 1972, and for tho six-month period ending December 31, 1962, Certified’s financial condition was as follows:

Total Net sales Netincome Retained assets earnings June 30, 1972_ Bone vae chee ceeeeceeeeeereeee $9,322,225 $9, 753, 178 $321, 910 $717, 865 6-month period ending December 31, 1962... 9, 204, 364 7, 140, 043 57, 521 1775, 386 1 (CX 23:0.X 26 A-M) A thorough investigation of Certified was made by representatives of Bankers Trust Company in December 1962 and January 1963. Although “pressures were mounting,” Certified’s situation “was not considered critical” by these financial experts at that time. (CX 52(a)) The firm still had retained earnings, a substantial net worth, expanding sales and the expectation of a profitable year. ‘ Uap a WY 2UK7 4 420i Wartisauy wars Vavse DR arany a +aase wua Complaint