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This excerpt taken from the XIDE 10-K filed Jun 11, 2007. Historical
Federal Plea Agreement
In 2001, the Company reached a plea agreement with the
U.S. Attorney for the Southern District of Illinois
resolving an investigation into a scheme by former officers and
certain corporate entities involving fraudulent representations
and promises in connection with the distribution, sale and
marketing of automotive batteries between 1994 and 1997. The
Company agreed to pay a fine of $27.5 million over five
years, five-years probation and to cooperate with the
U.S. Attorney in its prosecution of the former officers.
The Company was sentenced pursuant to the terms of the plea
agreement in February 2002. Generally, failure to comply with
the provisions of the plea agreement, including the obligation
to pay the fine, would permit the U.S. Government to reopen
the case against the Company.
On April 15, 2002, the Company filed for protection under
Chapter 11 of the Bankruptcy Code. Later in 2002, the
U.S. Attorney’s Office for the Southern District of
Illinois filed a claim as a general unsecured creditor of the
Company’s subsidiary, Exide Illinois, Inc. for
$27.9 million. The Company did not pay any installments of
the criminal fine before or during its bankruptcy proceedings,
nor did it pay any installments of the criminal fine after the
Company emerged from bankruptcy in May 2004. As previously
reported, if the U.S. Government were to assert that the
obligation to pay the fine was not discharged under the Plan of
Reorganization, the Company could be required to pay it.
In December 2004, the U.S. Attorney’s Office requested
additional information regarding whether the Company adequately
disclosed its financial condition at the time the plea agreement
and the associated fine were approved by the U.S. District
Court. The Company supplied correspondence and other materials
responsive to this request.
On November 18, 2005 the U.S. Attorney’s Office
filed a motion in the District Court for a hearing to make
inquiry of the Company’s failure to comply with the
Court’s judgment and terms of probation, principally
through failure to pay the fine, and a motion to show cause why
the Company should not be held in contempt. In its motion, the
U.S. Attorney’s Office asserted that Exide Illinois
was in default from its nonpayment of the criminal fine and was
in violation of the terms of probation. The U.S. Attorney
also asserted that bankruptcy does not discharge criminal fines,
and that the Company did not adequately disclose its financial
condition at the time the plea agreement and associated fines
were approved by the District Court.
On May 31, 2006, the District Court approved a Joint
Agreement and Proposed Joint Resolution of Issues Raised in the
Government’s Motion Filed on November 18, 2005
regarding the payment of criminal fine. The District Court
entered an order consistent with the Joint Agreement and
Proposed Joint Resolution, and modified the Company’s
schedule to pay the $27.5 million fine through quarterly
payments over the next five years, ending in 2011.
Under the order, Exide Technologies was required provide
security in a form acceptable to the court and to the government
by February 26, 2007 for its guarantee of any remaining
unpaid portion of the fine, but could petition the court prior
thereto if the Company believed its financial viability would be
jeopardized by providing such security. The court’s order
reflects that the Company is not obligated to pay interest on
outstanding amounts of unpaid fine if the Company is current on
all installment payments, and allows for penalties and interest
to be imposed if the Company does not comply with the modified
fine payment schedule. On January 25, 2007, the Court
entered an order which provided, in part, that Exide is excused
from
Table of Contents
EXIDE
TECHNOLOGIES AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
the requirement to provide adequate security to the United
States before the expiration of its term of probation for the
remaining unpaid fine amount.
This excerpt taken from the XIDE 10-K filed Jun 29, 2005. Historical Federal Plea Agreement
In 2001, the Company reached a plea agreement with the U.S. Attorney for the Southern District of Illinois resolving an investigation into a scheme by former officers and certain corporate entities involving fraudulent representations and promises in connection with the distribution, sale and marketing of automotive batteries
F-41
Table of ContentsEXIDE TECHNOLOGIES AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
between 1994 and 1997. The Company agreed to pay a fine of $27,500 over five years, to five-years’ probation and to cooperate with the U.S. Attorney in her prosecution of the former officers. Generally, failure to comply with the provisions of the plea agreement, including the obligation to pay the fine, would permit the U.S. Government to reopen the case against the Company. In 2002, the United States Attorney’s Office for the Southern District of Illinois filed a claim as a general unsecured creditor for $27,900. Also, if the U.S. Government were to assert that the obligation to pay the fine was not discharged under the Plan of Reorganization, the Company could be required to pay it. In January 2005, the U.S. Attorney’s Office requested additional information regarding whether the Company adequately disclosed its financial condition at the time the plea agreement and the associated fine were approved by the U.S. District Court. The Company supplied correspondence and other materials responsive to this request.
This excerpt taken from the XIDE 10-K filed Mar 1, 2005. Historical Federal Plea Agreement
In 2001, the Company reached a plea agreement with the U.S. Attorney for the Southern District of Illinois resolving an investigation into a scheme by former officers and certain corporate entities involving fraudulent representations and promises in connection with the distribution, sale and marketing of automotive batteries between 1994 and 1997. The Company agreed to pay a fine of $27,500 over five years, to five-years’ probation and to cooperate with the U.S. Attorney in her prosecution of the former officers. The payment terms of the plea agreement, which was accepted by the U.S. District Court for the Southern District of Illinois on February 27, 2002, are dependent upon the Company’s compliance with the plea agreement during the five-year probation period. Generally, the terms of the probation would permit the U.S. Government to reopen the case against the Company if the Company violates the terms of the plea agreement or other provisions of law. In 2002, the United States Attorney’s Office for the Southern District of Illinois filed a claim as a general unsecured creditor for $27,900, and the Company presently expects that the fine will be treated pursuant to the terms of the Plan.
This excerpt taken from the XIDE 10-Q filed Feb 14, 2005. Historical Federal Plea Agreement
In 2001, the Company reached a plea agreement with the U.S. Attorney for the Southern District of Illinois resolving an investigation into a scheme by former officers and certain corporate entities involving fraudulent representations and promises in connection with the distribution, sale and marketing of automotive batteries between 1994 and 1997. The Company agreed to pay a fine of $27.5 million over five years, to five-years’ probation and to cooperate with the U.S. Attorney in her prosecution of the former officers. Generally, failure to comply with the provisions of the plea agreement, including the obligation to pay the fine, would permit the U.S. Government to reopen the case against the Company. In 2002, the United States Attorney’s Office for the Southern District of Illinois filed a claim as a general unsecured creditor for $27,900. Also, if the U.S. Government were to assert that the obligation to pay the fine was not discharged under the Plan of Reorganization, the Company could be required to pay it. The U.S. Attorney’s Office recently requested additional information regarding whether the Company adequately disclosed its financial condition at the time the plea agreement and the associated fine were approved by the U.S. District Court. The Company has supplied correspondence and other materials responsive to this request.
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