In New York, The DOW Jones is reporting, “shares of Reddy Ice Holdings Inc. (FRZ) rose sharply Tuesday in speculation the company may soon settle a price-fixing probe being conducted by a wing of the Justice Department.” According to the Wall Street Journal, “in November 2008, the company disclosed that the civil fraud division was looking into whether the packaged-ice company violated the federal False Claims Act by getting “supracompetitive prices” from the federal government in connection with government contracts.” At the beginning of the year, the company had stated that it will be settling with one of its insurance carriers regarding “claims for reimbursements of the costs of ongoing antitrust investigations and related civil litigation, ” and would receive $6.6 million from the insurer. With Reddy Ice’s recent share climbs of 8.1%, settlement appears to be imminent. It has been speculated that Reddy will follow in the same direction as their competing firms to put price-fixing probes behind them. The two largest competitors of Reddy Ice are Home City Ice Co. and Artic Glacier Income Fund both of which settled similar suits with the DOJ. In the Arctic Glacier settlement, the firm’s U.S. subsidiary agreed to cooperate with the DOJ’s ongoing investigations with other individuals and companies, as well as pay a $9 million fine.
To report violations of the federal False Claims Act, contact Frohsin & Barger.