Sysco, a leading restaurant food distributor, and an affiliate of litigation funder Burford have jointly filed objections challenging a judge’s decision to prevent the latter from stepping in for Sysco in a significant antitrust case involving the country’s top pork producers.
In their objections, the two parties contend that the judge inaccurately interpreted the dynamics of their relationship. From 2019 to 2022, Burford extended more than $140 million in capital to Sysco, leveraging the proceeds from Sysco’s antitrust claims against various meat suppliers. Contrary to prior claims, the capital injection was not primarily allocated for litigation expenses but rather aimed at bolstering Sysco’s financial resilience amid the challenges posed by the COVID-19 pandemic.
The original financing agreement did not initially empower Burford with the authority to influence settlements. However, due to Sysco’s violation of the agreement’s anti-assignment provision, the terms underwent revisions, mandating Burford’s consent for settlements, which Sysco could not unreasonably withhold.
In September 2022, Sysco sought to settle with defendants against Burford’s objections, resulting in arbitration. The subsequent ruling by an appeals court favored Burford, leading to the resolution of the dispute between the litigation funder and Sysco.
Following the settlement, Sysco transferred its claims to Carina, a subsidiary of Burford. Despite this resolution, the magistrate judge denied Carina’s substitution as a party in the ongoing litigation. The litigation funder argues that this denial does not alter Carina’s legal rights under the assignment agreement.
The dispute underscores the complexities surrounding the financial arrangement and subsequent events, prompting Sysco and the litigation funder to challenge the judge’s decision and seek a reconsideration.
This development adds another layer to the intricate legal landscape of the antitrust case, introducing questions about party substitutions and the rights of entities involved in the resolution process.
