Tyson Cries Foul Over Burford Substitution in Sysco Settlement

Burford Capital is facing new obstacles in its plan to take over price-fixing lawsuits it funded for Sysco Corp.

US Magistrate Judge John F. Docherty on Wednesday indicated that he will hold hearings to review Sysco’s requests to substitute a Burford affiliate as the lead plaintiff in two separate cases against poultry and beef processors.

Food companies sued by Sysco for alleged antitrust violations, including Tyson Fresh Meats Inc, JBS USA Food Co. and others, last week told told a federal court in Minnesota that they need more information on the plan. Burford’s role in the litigation remains “shrouded in mystery,” another defendant, Triumph Foods, said.

Burford gave Sysco $140 million to pursue the lawsuits. The companies announced last week that they reached a deal to end a dispute after Sysco accused Burford of meddling in the suits and blocking a settlement the funder deemed “too low.”

The companies resolved the fight with Sysco agreeing to assign Burford its legal claims against the food suppliers. Sysco filed a motion to substitute Burford affiliate Carina Ventures LLC as the plaintiff in the suits as part of the deal.

Antitrust claims can be assigned in this way, according to lawyers not involved in the case, subject to court approval.

Boies Schiller Flexner is set to represent Carina in the lawsuits, according to court filings. The firm previously represented Sysco, but was discharged by the company after Sysco claimed a Boies Schiller lawyer conspired with Burford to block the settlements.

The fight offered a peek inside the shadowy world of litigation funding, a $13.5 billion industry in which outside investors pool money to bet on lawsuits. It also highlighted concerns that funders are actually calling the shots on how those cases are handled.

Burford declined to comment on the outcome of that case but refuted the suggestion that it controlled the litigation from the outset. The company has said Sysco gave it veto authority over the settlement talks—power that Burford says it normally doesn’t have—after Sysco violated the terms of the funding agreement.

Sysco and Triumph, through an attorney, declined to comment. A lawyer for Tyson did not respond to a request for comment.

The case is: In Re: Pork Antitrust Litigation, D. Minn., No. 18-1776, 7/5/23