Otterbourg Successful in Dismissing Antitrust Complaint against 3 Commercial Finance Firms
June 4, 2010
In an antitrust action commenced against eight factors by the Trustee of Factory 2-U, a clothing retailer currently in Chapter 7 bankruptcy, the Trustee moved to alter or amend the previous judgment of the United States District Court for the District of Delaware dismissing the Trustee's complaint and for leave to serve an amended complaint. The Trustee argued that the Court should permit the Trustee to amend its prior complaint on the grounds that the defendants would not be prejudiced and that the proposed amended complaint stated facts sufficient to support a claim regarding credit information sharing among factors and an allegedly illegal agreement to deny credit to Factory 2-U in violation of Section 1 of the Sherman Act.
Otterbourg, representing GMAC Commercial Finance, Sterling Factors Corporation and Wells Fargo Trade Capital Services, prevailed in its opposition to the Trustee's motion. The Court determined that the Trustee had failed to meet the standard required for such post-judgment motions.
The earlier District Court decisions held that the sharing of credit data is not illegal, that the Trustee’s complaint failed to contain sufficient factual allegations to support the Trustee’s contention that defendants acted in concert, and that documents filed in the Factory 2-U bankruptcy provided an alternative explanation for Factory 2-U’s woes.
Please see the full text of the Magistrate’s March 30, 2009 Report and Recommendation. The text of the District Court’s May 31, 2009 Memorandum Opinion is available here. The District Court’s June 4, 2010 Memorandum Opinion dismissing the Trustee's motion may be seen here.
