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Supreme Court Justice Steps Out of Kodak-Fuqua Deal Dispute

April 1, 1988

WASHINGTON (AP) _ A Supreme Court justice Friday stepped out of a legal dispute over the merger of the photofinishing operations of Eastman Kodak Co. and Fuqua Industries Inc. - one he had entered a day before.

Justice Byron R. White set aside an emergency order he had issued Thursday on the request of Phototron Corp., ruling that the request apparently was made too late.

White on Thursday had set aside a federal appeals court decision that cleared the way for the merger despite a pending antitrust challenge by Phototron.

But in Friday’s superseding, one-paragraph order, White said, ″It appearing that the transaction ... was actually closed before (my) temporary stay was issued, the temporary stay is vacated.″

White’s order noted that he was ″not advised of the closing″ when he issued Thursday’s order.

The deal between Kodak and Fuqua created the nation’s largest wholesale photofinishing operation.

Kodak and the Atlanta-based Fuqua wasted no time in completing the deal Tuesday after the 5th U.S. Circuit Court of Appeals on Monday reversed a federal trial judge’s injunction against the merger. The injunction had been issued Feb. 22.

The appeals court ruled that Phototron had no right to try to block the merger, although it said the San Bernadino, Calif., corporation may continue pursuing its related antitrust lawsuit against Kodak.

The new merged operation, Qualex Inc., combines Colorcraft Corp., a Fuqua subsidiary, with Kodak-owned laboratories. It has 94 processing labs around the country.

The new company is to be based in Durham, N.C., the home of Colorcraft, and Colorcraft’s former chairman, D. Carl Hamill, will serve as chief executive officer.

Phototron’s suit, pending in federal court in Fort Worth, Texas, contends that the merger violates federal antitrust law by forcing non-Kodak processing labs out of business.

Phototron is seeking $250 million in damages.

After White’s action Thursday purportedly postponing the merger, lawyers for Kodak and Fuqua informed him that the merger occurred Tuesday.

Any court action now, White was told, ″would amount to nothing more than a mere declaration in the air.″

The Kodak and Fuqua lawyers said that they informed Phototron on Wednesday of the merger, before Phototron sought emergency help from White.

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