DOJ’s Latest “Gun Jumping” Case Raises Questions

February 16, 2010
The Department of Justice’s recent Hart-Scott-Rodino Act (HSR) “gun-jumping” settlement with Smithfield Foods, Inc. and Premium Standard Farms, LLC suggests that the Justice Department may be taking aim at covenants in transaction documents that preclude the seller from engaging in material transactions if they are in ordinary course business activities consistent with past practice. This update examines the settlement and the importance of consulting antitrust counsel to advise on the transaction documents and to determine which activities are permissible before and during the HSR waiting period in order to avoid potential antitrust liability for impermissible premerger coordination.