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Settlement in JBS Lawsuit

10/16/2019

Specialist legal periodical Law 360 reported a $42 million settlement between a shareholder and JBS SA the majority owner of Pilgrim’s Pride with close to 75 percent of equity.

In 2017, JBS engineered a purchase of Moy Park, an integrator located in Northern Ireland owned by JBS, to U.S. subsidiary Pilgrim’s Pride. The transaction was valued at $1.3 billion. At the time CHICK-NEWS questioned the validity of the sale which effectively transferred the purchase price from Pilgrim’s Pride to the parent company to the disadvantage of minority shareholders holding approximately 22 percent of the equity of Pilgrim’s Pride.

The justification for the financial maneuver was for JBS to raise $3.2 billion levied as a fine on the company as a result of illegal dealings. These included wide-scale bribery involving the highest levels of government and officials at the Brazilian Development Bank (BNDES) and State-employee pension funds.

The suit was filed in the Court of Chancery, the state of Delaware by Matthew Sciabacucchi who claimed that the transaction had not been approved by an independent committee of the Board and ignored the interest of minority shareholders. The Sciabacucchi claim was consolidated with a parallel suit filed by the Retirement System for Employees of the City of St. Louis.