Ainsworth settles OSB lawsuit
Canadian wood products manufacturer Ainsworth has become the second defendant to opt out of a U.S. class action lawsuit against oriented strand board (OSB) producers by agreeing to an $8.6 million settlement. In a prepared statement released on Oct. 19, the company stressed that it denies “each and every one of the plaintiffs’ claims and strongly asserts that it has not violated U.S. antitrust or any other laws.” The decision to enter into the settlement “was solely based on the need to avoid prolonged, expensive litigation,” the statement said.
The antitrust case, filed in February 2006 and granted class action status on Aug. 3, alleges that OSB manufacturers began conspiring together in 2002 to artificially reduce the supply and inflate the prices of OSB. Other defendants named in the lawsuit are Louisiana-Pacific, Weyerhaeuser, Norbord Industries, Potlatch, Tolko Industries and Grant Forest Products.
J.M. Huber has also agreed to a settlement, agreeing to pay $2 million to individuals or businesses that purchased OSB from June 1, 2002, to March 5, 2007. All settlements will be held in escrow until the entire case is resolved.
In a statement filed with the court, Huber also denied the charges but cited the expense and distraction of litigation as its reason for exiting the case.
Levitt and Sons declares bankruptcy
Fort Lauderdale, Fla.-based home builder Levitt and Sons has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida, following a housing downturn and credit market disruptions.
“This downturn has been particularly sudden and steep in Florida and in the Southeastern United States — the markets in which Levitt and Sons operates,” the company said in a statement.
In its bankruptcy filing, the company lists assets of less than $1 million with more than $100 million in debts. In an earlier filing with the Securities and Exchange Commission, Levitt and Sons said it had defaulted on more than $300 million in loans with several lenders, including Bank of America and Wachovia.
Levitt and Sons, the home building subsidiary of Levitt Corp., said in a statement the move was a response to “unprecedented conditions in the homebuilding industry, which have severely impacted the company.” Options in the restructuring process include the sale of the company.
“We deeply regret the impact the Chapter 11 filing of Levitt and Sons will have on homeowners, vendors and employees,” said Lawrence Young, who recently was named to the company’s new position of chief restructuring officer. “As part of this process, we will explore the potential sale of all or some of Levitt and Sons’ assets.”
Within the last year, Levitt and Sons downsized operations in Tennessee and exited the Memphis and Nashville markets, reduced staffing and worked with subcontractors to help reduce costs. However, the company’s financial position took a blow in August when credit market disruption led to more cancellations and fewer buyers, the company said.
Same-store sales up 1.9 percent at Tractor Supply
Farm and fleet retailer Tractor Supply saw third-quarter earnings of $17.5 million, down 3.3 percent from $18.1 million last year. Sales were up 12.5 percent to $629.2 million from $559.2 million in the previous year.
Same-store sales increased 1.9 percent at the retailer. The company said it saw an increase in expenses that it attributed to payroll increases and occupancy from new stores. Tractor Supply opened 21 new stores in the quarter and closed none, a higher count than the 18 stores the company opened — and one store it closed — in the third quarter last year.
Jim Wright, president and CEO of Tractor Supply, highlighted growth categories in the third quarter — notably the company’s core “lifestyle” categories, such as animal health products and pet supplies. Still, the company was “disappointed” with sales performance in its seasonal merchandise category, he said.
“Despite challenges presented by drought conditions and consumer pressures impacting discretionary purchases, we achieved positive comparable-sales growth as well as slight gross margin improvement,” Wright noted.
Tractor Supply also lowered its guidance for the full fiscal year, blaming a “delayed onset of colder weather” and “continued external pressures on the consumer.”
“We believe it is more appropriate to temper our outlook for our performance through the remainder of the year,” Wright said.
Additionally, Tractor Supply announced it has named Gregory Sandfort chief merchandising officer.
Sandfort formerly served as president and chief operating officer at Michaels Stores. Prior to that, he served as chief merchandising officer at Michaels and held merchandising management spots at Sears and Federated Department Stores.
Based in Brentwood, Tenn., Tractor Supply is one of the country’s largest retail farm and ranch store chains.