Forest giant slammed for breach

After a year of thought and 138 pages of opinion, a federal banktruptcy judge in Atlanta has ruled that Weyerhauster Co. breached its warranties against infringement when it spun off a division in an IPO whose disposable diapers infringed patents held by Kimberly-Clark and Proctor & Gamble.  Judge Margaret Murphy assessed damages at $457.8 milion.

One of the interesting features about the case is that ordinarily a claim for failure to disclose in an IPO would be governed by securities laws (which Weyerhauser says were not violated) but the judge decided to proceed under a contract theory.