International Paper has agreed to settle the Kleen Products antitrust class action lawsuit, which was filed in 2010 against it and seven other containerboard producers.
The lawsuit is pending in the US District Court for the Northern District of Illinois.
If approved by the court, the agreement would resolve disputed claims involving the price of containerboard products purchased directly from International Paper, Temple-Inland Inc. and Weyerhaeuser Company by the class members at any time prior to the date of court approval.
Under the terms of the agreement, the Company will pay $354 million into a settlement fund in return for dismissal and release of all claims. The Company will record a reserve for the expected settlement, which will result in a pre-tax charge of $354 million ($219 million, net of tax) in the second quarter of 2017.
"We continue to maintain that the allegations are baseless and without merit," said Mark Sutton, Chairman and Chief Executive Officer.
"However, we have agreed to settle this lawsuit in order to avoid substantial on-going legal expenses and the inherent risks of a multi-billion-dollar class-action lawsuit."
In this complex class-action case, where any award would be tripled and potentially paid by International Paper alone, this settlement avoids the substantial uncertainty of continued involvement with this litigation and a possible adverse jury verdict.