NEW YORK (CNNfn) - The Justice Department has retained a New York investment firm to help analyze the financial effect of possible remedies against Microsoft Corp. - including a break-up of the software powerhouse, as the two sides await a final decision in their long-running antitrust trial.|
The move lends greater credence to the possibility that the government will seek a breakup of the software powerhouse if the two sides don’t reach a settlement before a federal judge hands down his final decision.
In a brief statement issued Thursday, the Justice Department said Greenhill & Co. would act as "financial advisor to assist the [antitrust] division in analyzing financial aspects of the full range of potential remedies in U.S. v. Microsoft, including conduct and structural relief."
William Kovacic, an antitrust professor at George Washington University Law School, said the Justice Department’s move is a strong indication that it is seriously considering a breakup of the company.
"This is exactly the kind of thing you do if you’re thinking about a breakup,” he said.
"You need the securities industry to tell you how to restructure a company. The real heavy lifting involves how you restructure a firm and carry it out in a way that is the least disruptive to its routine operations, and the least frightening to the investment community.”
Kovacic also noted that in retaining Greenhill, the Justice Department will have more leverage in convincing U.S. District Judge Thomas Penfield Jackson -- who is overseeing the antitrust trial -- that a breakup would leave Microsoft (MSFT) with three or four viable businesses while still being the appropriate punishment for any antitrust violations.
In early November, Jackson found that Microsoft held monopoly power in the PC operating systems market in his findings of fact, a strong indication that he would rule that the company violated antitrust laws when he issues his final decision early next year.
Jim Cullinan, a Microsoft spokesman, said he wasn’t aware of the Justice Department’s statement, but added that "it’s far too premature to discuss remedies” for the case.
Earlier this week, Microsoft, the Justice Department and several state attorneys general began settlement negotiations with Richard Posner, chief judge of the U.S. Court of Appeals for the 7th Circuit, acting as mediator.
Last month, Jackson appointed Posner as mediator. According to courtroom transcripts, Jackson was "partly motivated” by reports in the press that the Justice Department and the states might seek different remedies if Microsoft loses the case.
Government lawyers are scheduled to file a brief on Monday outlining how to apply antitrust laws to Jackson’s findings of fact, with Microsoft due to file its responding brief on Jan. 17.
The government would then get a chance to file a response by Jan. 24, with Microsoft's final response
due Jan. 31.
Barring a settlement, Jackson is expected to deliver his conclusions of law - his final verdict - in the Spring.
Earlier this year, Greenhill, a privately held investment bank, advised Web portal AltaVista in its $2.9 billion acquisition by Internet incubator CMGI (CMGI).
Microsoft shares rose 1-5/8 to close at 94-13/16 in Thursday trade.