In a warning to corporations plagued by litigation woes, the U.S. 3rd Circuit Court of Appeals ruled that SGL Carbon AG misused U.S. bankruptcy laws when a financially healthy unit filed for Chapter 11 protection to prod customers into settling antitrust lawsuits.

The Philadelphia-based 3rd Circuit concluded Dec. 29 that SGL Carbon Corp., SGL Carbon’s U.S. arm, improperly sought protection from creditors in U.S. Bankruptcy Court in Wilmington last year to gain leverage in antitrust suits alleging the company engaged in price fixing, rather than filing to reorganize to address business problems.