Tyson Foods, Inc. (NYSE: TSN) terminated its proposed acquisition of IBP, inc. (NYSE: IBP) on March 29th and filed suit in the Chancery Court of Washington County, Arkansas alleging fraud and breach of contract by IBP. The next day, IBP cross-complained against Tyson, claiming Tyson had breached the acquisition agreement, in a previously filed shareholder suit in Delaware that IBP had moved to dismiss. On April 2nd IBP amended its cross-complaint against Tyson saying an early confidentiality agreement between the parties required all disputes be heard in Delaware. Vice Chancellor Leo E. Strine, who presides over the Delaware proceeding, scheduled trial on IBP's breach of contract claims to begin May 14th. On April 4th Tyson moved to stay the Delaware proceeding.

On April 16th, Judge Mary Ann Gunn, who presides over the Arkansas proceeding, scheduled trial on Tyson's fraud and breach of contract claims to also begin May 14th, noting that IBP's claim was filed a day after Tyson's and that the Delaware Court had not acted upon Tyson's motion to stay the subsequently filed action. At the April 16th hearing, IBP argued it had not been properly served; did very little business in Arkansas, although it is the major supplier of beef and pork to Arkansas based retailers; and the confidentiality agreement required the dispute be heard in Delaware.

Today Vice Chancellor Strine denied Tyson's petition to stay the Delaware action finding the Arkansas and Delaware actions were "contemporaneously filed." He also noted the confidentiality agreement requires the dispute be heard in Delaware and may limit Tyson's ability to assert claims based upon false, misleading or incomplete material supplied by IBP. He found that because of the "exclusive jurisdiction" provision of the confidentiality agreement, the Arkansas court "cannot do complete justice in this case."

Tyson Foods, Inc. General Counsel, Les R. Baledge, said, "We are in the unusual position of having the Arkansas fraud and Delaware breach of contract trials scheduled to begin on the same day. We will respond promptly to both courts and look forward to quick resolution of all our claims."

In its Arkansas action Tyson seeks judgment terminating the acquisition agreement, return of $66.5 million loaned to IBP upon execution of the agreement, reimbursement of costs incurred by Tyson and damages for IBP's fraud in the proposed $4.7 billion transaction.

Tyson Foods, Inc., headquartered in Springdale, Ark., is the world's largest fully integrated producer, processor and marketer of chicken and chicken-based convenience foods, with 68,000 team members and 7,400 contract growers in 100 communities. Tyson has operations in 18 states and 15 countries and exports to 73 countries worldwide. Tyson is the recognized market leader in almost every retail and foodservice market it serves. Through its Cobb-Vantress subsidiary, Tyson is also a leading chicken breeding stock supplier. In addition, Tyson is the nation's second largest maker of corn and flour tortillas under the Mexican Original® brand, as well as a leading provider of live swine.