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Sotheby's Settles Suits in Alleged Price Fixing

Antitrust: The buyers and sellers accused the world's No. 2 auction house of colluding on fees with rival Christie's.

September 25, 2000|From Bloomberg News

NEW YORK — Sotheby's Holdings Inc. and former Chairman A. Alfred Taubman agreed to pay a total of $326 million in cash, stock and discount coupons to settle a civil antitrust lawsuit and a shareholder suit, the company said Sunday.

The world's No. 2 auction house will pay $256 million to settle the civil antitrust suit, said Sotheby's spokesman Matthew Weigman. The suit, brought by buyers and sellers, accused Sotheby's of colluding on fees with rival Christie's International.

Taubman will pay the company $156 million as part of the antitrust settlement, Sotheby's said. The rest of the settlement is made up of $50 million in cash from Sotheby's and $50 million in discount coupons on future auction commissions, Weigman said.

A separate shareholder class-action suit was also settled, Weigman said. Taubman will pay $30 million in cash to shareholders in the suit, and Sotheby's will issue $40 million in Class A common stock to the shareholders.

Justice Department prosecutors have been conducting a three-year criminal investigation into whether Sotheby's and Christie's agreed to fix prices. New York-based Sotheby's said it is in "serious negotiations" with the Justice Department.

"The settlements we have approved today resolve the lawsuits in which the company had the greatest potential financial exposure. With a Justice Department resolution in prospect, the company can move forward with its business under the strong leadership of its current management team," Michael Sovern, chairman of the board of Sotheby's Holdings, said in the prepared statement.

The announcement came two days after the New York Times reported that Sotheby's and Christie's each had tentatively agreed to pay $256 million in a price-fixing case. That amount would make this one of the largest ever antitrust settlements, the paper said.

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