This excerpt taken from the LPL 20-F filed Jun 23, 2009.
In December 2006, the Company received notice that it was under investigation by the Korea Fair Trade Commission, the Japan Fair Trade Commission, the Antitrust Division of the U.S. Department of Justice, and the European Commission with respect to possible anti-competitive activities concerning allegations of price fixing by manufacturers in the TFT-LCD industry. The Company later received notice that it was under similar investigations by the Canadian Competition Bureau and the Taiwan Fair Trade Commission. In November 2008, the Controlling Company executed an agreement with the U.S. Department of Justice under which the Controlling Company and its subsidiary, LG Display America, Inc., would plead guilty to a criminal Sherman Act violation and pay a single total fine of US$400 million. In December 2008, the United States District Court for the Northern District of California accepted the terms of the plea agreement and entered a judgment that sentenced the Controlling Company and LG Display America, Inc. to pay the US$400 million according to the following schedule: US$20 million, and interest thereon, by June 15, 2009, and US$76 million, and interest thereon, by each of June 15, 2010, June 15, 2011, June 15, 2012, June 15, 2013 and December 15, 2013, respectively. The agreement resolves all federal criminal charges against the Company in the United States in connection with this matter, provided the Company continues to cooperate with the ongoing investigation. The Company is cooperating with the ongoing investigations by the U.S. Department of Justice and other regulatory bodies.
Subsequent to the commencement of the U.S. Department of Justice investigation, a number of purported class action lawsuits were filed against the Company and other TFT-LCD panel manufacturers in various U.S. federal district courts, alleging violation of U.S. antitrust laws and other related laws. In a series of decisions in 2007 and 2008, all of such cases were transferred to the Northern District of California for pretrial proceedings. An additional claim by a customers assignee has also been filed in the Northern District of California. Purported class action complaints have also been filed against the Company in various Canadian courts, alleging violation of Canadian antitrust laws. The Company intends to defend these suits vigorously.
In addition, purported class action lawsuits have been brought against the Company, and certain of its officers and directors, in the United States District Court for the Southern District of New York in 2007, alleging, among other things, that the Company
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2006, 2007 and 2008
and certain of its officers and directors violated the U.S. Securities Exchange Act of 1934, or the Exchange Act, in connection with possible anti-competitive activities in the TFT-LCD industry. The Company intends to defend these suits vigorously.
Management believes the amount of the possible loss or range of loss associated with each of the above proceedings (with the exception of the U.S. federal criminal proceeding in which a fine has already been imposed), including private claims for damages, is currently not estimable, due to the considerable uncertainty associated with these proceedings, so no provisions have been taken in this regard. Given the uncertain nature of these regulatory proceedings and civil damages suits, the ultimate resolutions of these matters may have a material adverse effect on the Companys results of operations, financial position and cash flows.
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Investments in debt and equity securities that are classified as available-for-sale, and derivatives financial instruments on a recurring basis.
Effective January 1, 2008, SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115, permits the Company to elect to use fair value to measure eligible items at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. As of December 31, 2008, management did not elect to adopt the fair value option.
SFAS No. 157 defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements for fair value measurements. Additionally, SFAS No. 157 amended SFAS No. 107, Disclosure about Fair Value of Financial Instruments (SFAS No. 107). The disclosures required under SFAS No. 157 and SFAS No. 107 have been included in this note. The Company has deferred the application of SFAS No. 157 for its nonfinancial assets and liabilities which are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.