CompuCredit Holdings Corp. v. Akanthos Capital Management, LLC
916 F. Supp. 2d 1326
N.D. Ga.2011Background
- Defendants hold convertible senior notes issued by CompuCredit in 2005 under two indentures, owning ~70% of the notes; 2025 and 2085 maturities.
- This suit follows related UFTA litigation alleging solvent distress and coercive measures to obtain repurchase at inflated prices.
- UFTA litigation sought to enjoin dividend/spinoff, with district court denying prelim injunction despite pro‑forma insolvency findings.
- Antitrust action (this case) alleges Defendants conspired to inflate prices to extinguish CompuCredit’s debt by purchasing notes after initiating UFTA litigation.
- Plaintiff seeks Sherman Act relief and monetary/tendering remedies; Defendants move for judgment on the pleadings and to strike allegations, with Rule 11 sanctions reserved.
- Court ultimately grants judgment on the pleadings and denies the strike motion as moot, dismissing antitrust claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether creditors’ joint action can violate the Sherman Act | CompuCredit argues collectors’ collusion to maximize debt collection violates Sherman Act | Defendants contend no antitrust liability for creditor coordination in collecting existing debts | No Sherman Act violation; activity akin to creditor collection, not anticompetitive |
| Whether the complaint states a Sherman Act claim under Rule 12(c) standard | Allegations show collusive conduct inflating note prices | Claims fail as activities are not anticompetitive and are allowed in creditor negotiations | Plaintiff’s claims fail; judgment on the pleadings granted |
| Whether the court should strike allegations under Rule 12(f) | Allegations are relevant to the antitrust claim | Requests to strike are moot if judgment on pleadings resolves the case | Denied as moot in light of judgment on the pleadings |
Key Cases Cited
- Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980) (cases involving future credit terms, not existing debt collection)
- Fortner Enter., Inc. v. U.S. Steel Corp., 394 U.S. 495 (1969) (tying arrangements involving future lending)
- United Airlines, Inc. v. U.S. Bank, N.A., 406 F.3d 918 (7th Cir. 2005) (creditor coordination to collect debt not antitrust violation)
- Sharon Steel Corp. v. Chase Manhattan Bank, N.A., 691 F.2d 1039 (2d Cir. 1982) (collective action by creditors against a debtor not injurious to consumers)