Tyson shareholder lawsuit is settled
January 22, 2008
by Bryan Salvage
SPRINGDALE, ARK. ― A shareholder deriva
tive lawsuit against certain current and former directors of Tyson Foods Inc. and the Tyson Limited Partnership has been settled, the company said on Jan. 18, subject to obtaining court approval.
The lawsuit is in regards to Tyson Foods Inc. Consolidated Shareholders Litigation, C.A. No. 1106-CC, which has been pending in the Delaware Court of Chancery since 2005. The allegations of the lawsuit have been described in previous filings by the company with the Securities and Exchange Commission. The full text of the settlement is available in a Form 8-K filing the company made with the S.E.C.
Under the settlement, all claims against all defendants will be dismissed. In exchange, Don Tyson and the Tyson Limited Partnership, the company’s largest shareholder, have agreed to pay the company $4.5 million. No other defendant will make any payments. The company also has agreed to implement or continue certain governance measures, which includes the establishment of a nominating committee, appointment of a new independent director, and limitations on new related party transactions between the company and the Tyson Limited Partnership, Don Tyson, members of his family or executive officers.
The plaintiffs also are seeking $3 million from the company, out of the $4.5 million to be paid to the company under the settlement, to cover their attorneys’ fees and expenses related to this case. Tyson officials said they will contest this requested fee award.
The settlement was filed on Jan. 18 with the Delaware Court of Chancery. The court is expected to issue a scheduling order after which time the Tyson shareholders will be formally notified and given the opportunity to submit any objections. This will be followed by a settlement hearing, which will likely be held in March or April.