Pulp and Paper Canada

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Weyerhaeuser held liable for bankruptcy


April 11, 2005
By Pulp & Paper Canada

An asset sale Weyerhaeuser made in 1993 has come back to haunt the company. Twelve years ago, Weyerhaeuser sold Par…

An asset sale Weyerhaeuser made in 1993 has come back to haunt the company. Twelve years ago, Weyerhaeuser sold Paragon’s newly issued stock to public investors. The company received more than $200 million in proceeds from the IPO. At the time of the offering, Weyerhaeuser had incorporated what it knew were patented features into diapers it sold in the business it transferred to Paragon, but did not have the licenses from its competitors to use this technology. As a result, Paragon’s use of this technology led to a patent infringement lawsuit against it by Proctor & Gamble, and another by Kimberly-Clark, events that led to Paragon’s bankruptcy declaration. Now U.S. Bankruptcy Judge Margaret Murphy has entered an order and judgement, holding Weyerhaeuser liable to the bankruptcy estate of Paragon Trade Brands for $457,858,150 million in damages, plus attorneys’ fees and interest. Weyerhaeuser is going to appeal the judgement.

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