Sysco’s plan to cede antitrust claims to Burford entity draws opposition

Tyson Foods, Perdue Farms, and other major meat industry suppliers that are challenging price-fixing claims in U.S. court said they oppose a plan to let a litigation funder affiliate take over as the plaintiff in the cases

In a court filing in Chicago, the chicken producers questioned the legality of a move by food distributor Sysco to assign certain antitrust claims to Carina Ventures, which is affiliated with litigation-funding powerhouse Burford Capital.

The defendants also told the court that “serious questions exist about the validity” of the agreement between Sysco and Carina. They pointed to a legal doctrine that bars the purchase of claims in a lawsuit by “strangers.”

 

 

 “Sysco is a plaintiff in antitrust litigation in Minnesota and Chicago federal courts, where the company and other corporate plaintiffs are pressing claims that meat industry suppliers conspired to artificially inflate prices over many years”

 

Sysco is a plaintiff in antitrust litigation in Minnesota and Chicago federal courts, where the company and other corporate plaintiffs are pressing claims that meat industry suppliers conspired to artificially inflate prices over many years.

Burford, which bills itself as the world’s largest litigation funder, makes investments in cases in exchange for a portion of any settlement or judgment at the end.

Critics of such arrangements have warned about litigation funders controlling cases. Burford has often said it does not dictate settlement strategy in its funded cases.

Burford and Sysco declined to comment on Thursday.

Tyson and Perdue also did not immediately respond to messages seeking comment.

Sysco’s deal with Carina, announced in June, stems from a $140 million investment that Burford made in Sysco’s antitrust litigation.

The move to assign claims appeared to end a public clash between Sysco and Burford over the antitrust litigation.

Burford in March had sought a court order in New York barring Sysco from settling claims for what the litigation funder called “low-ball” amounts and a “pittance.” Sysco had accused Burford of unfairly trying to control the cases.

Tyson and the other companies said in their court filing that Burford entity Carina, unlike Sysco, “had no interest in this case” before it bought the rights from Sysco.

The defendants also said they were worried that substituting Carina for Sysco “would meaningfully frustrate any future attempts for settlement discussions.”

The meat companies asked the Chicago court to deny Sysco’s move to assign its claims, or at least allow the companies to more fully examine the legal issues before any ruling.

Sysco’s move to assign claims to Carina in pork antitrust litigation in Minnesota is set for a hearing on Aug. 21.