Litigation Funder Burford Sues Sysco Over $140 Million Antitrust Investment

A dispute between Sysco Corp. and the world’s largest litigation funder is broadening, as Burford Capital Limited seeks a court order to bar the food distribution giant from settling price-fixing claims against major U.S. chicken, pork, and beef producers. Burford subsidiaries Glaz LLC, Posen Investments LP, and Kensosha Investments LP on Friday told a New York Supreme Court judge that Burford had advanced more than $140 million to Sysco in exchange for a share of any settlements in the antitrust litigation. Sysco was required to get Burford’s approval before signing any deals, the funder said. Burford claimed Sysco was preparing to settle for “low-ball” amounts and a “pittance.” An arbitration panel awarded Burford a preliminary injunction in a 2–1 order on March 10, barring Sysco from finalizing its proposed settlements. Burford’s new lawsuit in New York seeks confirmation of the arbitration panel’s award. Burford’s move comes after Sysco last week sued the Burford subsidiaries in Chicago federal court. Sysco accused the multibillion-dollar Burford of “forcing Sysco to continue to litigate against its will.” Burford Capital CEO Christopher Bogart said in a statement that Sysco’s Chicago case was “frivolous.” The company, he said, seemed to be trying “to score free media coverage” before the arbitration panel issued its preliminary injunction ruling. Sysco said in a statement on Monday that the arbitrators’ decision granting the injunction is contrary to precedent and public policy concerns about litigation control by funders. “The arbitration ruling and Burford’s petition [do] not change our position that Burford is attempting to unlawfully seize control of Sysco’s settlement rights and rewrite the terms of our contract,” Sysco said. The arbitration panel has not ruled on the merits of the dispute between Sysco and Burford but a majority concluded in the preliminary injunction award that Burford is likely to prevail. Sysco meanwhile in court filings on Friday said it was seeking new counsel to represent it as a plaintiff in various meat industry antitrust matters. The company said it was no longer working with Boies Schiller Flexner after the law firm allegedly took steps to “assist Burford in preventing the settlements.” Boies Schiller said in a statement that it “strongly” disputes Sysco’s accusations but cannot respond in more detail because of ethical duties to a former client. Details of Sysco’s proposed deals in the antitrust litigation, which has generated hundreds of millions of dollars in settlements for other plaintiffs as part of class action proceedings, were not revealed in court filings. The case is Glaz LLC, Posen Investments LP and Kensosha Investments LP v. Sysco Corp, New York State Supreme Court, case number pending. For plaintiffs: Thomas Dewey of Dewey Pegno & Kramarsky; Derek Ho of Kellogg, Hansen, Todd, Figel & Frederick; and Elizabeth Snodgrass of Three Crowns For Sysco: Jeffrey Rosenthal and Lina Bensman of Cleary Gottlieb Steen & Hamilton By Mike Scarcella

Litigation Funder Burford Sues Sysco Over $140 Million Antitrust Investment

A dispute between Sysco Corp. and the world’s largest litigation funder is broadening, as Burford Capital Limited seeks a court order to bar the food distribution giant from settling price-fixing claims against major U.S. chicken, pork, and beef producers.

Burford subsidiaries Glaz LLC, Posen Investments LP, and Kensosha Investments LP on Friday told a New York Supreme Court judge that Burford had advanced more than $140 million to Sysco in exchange for a share of any settlements in the antitrust litigation.

Sysco was required to get Burford’s approval before signing any deals, the funder said. Burford claimed Sysco was preparing to settle for “low-ball” amounts and a “pittance.”

An arbitration panel awarded Burford a preliminary injunction in a 2–1 order on March 10, barring Sysco from finalizing its proposed settlements. Burford’s new lawsuit in New York seeks confirmation of the arbitration panel’s award.

Burford’s move comes after Sysco last week sued the Burford subsidiaries in Chicago federal court. Sysco accused the multibillion-dollar Burford of “forcing Sysco to continue to litigate against its will.”

Burford Capital CEO Christopher Bogart said in a statement that Sysco’s Chicago case was “frivolous.” The company, he said, seemed to be trying “to score free media coverage” before the arbitration panel issued its preliminary injunction ruling.

Sysco said in a statement on Monday that the arbitrators’ decision granting the injunction is contrary to precedent and public policy concerns about litigation control by funders. “The arbitration ruling and Burford’s petition [do] not change our position that Burford is attempting to unlawfully seize control of Sysco’s settlement rights and rewrite the terms of our contract,” Sysco said.

The arbitration panel has not ruled on the merits of the dispute between Sysco and Burford but a majority concluded in the preliminary injunction award that Burford is likely to prevail.

Sysco meanwhile in court filings on Friday said it was seeking new counsel to represent it as a plaintiff in various meat industry antitrust matters. The company said it was no longer working with Boies Schiller Flexner after the law firm allegedly took steps to “assist Burford in preventing the settlements.”

Boies Schiller said in a statement that it “strongly” disputes Sysco’s accusations but cannot respond in more detail because of ethical duties to a former client.

Details of Sysco’s proposed deals in the antitrust litigation, which has generated hundreds of millions of dollars in settlements for other plaintiffs as part of class action proceedings, were not revealed in court filings.

The case is Glaz LLC, Posen Investments LP and Kensosha Investments LP v. Sysco Corp, New York State Supreme Court, case number pending.

For plaintiffs: Thomas Dewey of Dewey Pegno & Kramarsky; Derek Ho of Kellogg, Hansen, Todd, Figel & Frederick; and Elizabeth Snodgrass of Three Crowns

For Sysco: Jeffrey Rosenthal and Lina Bensman of Cleary Gottlieb Steen & Hamilton

By Mike Scarcella