People who sold their shares in meatpacker IBP after hearing that US poultry giant Tyson Foods had abandoned its takeover of the company, will be allowed to file a class action lawsuit against Tyson, following a federal court ruling.
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US District Judge Sue Robinson ruled that IBP shareholders who sold stock between 29 March 2001 and 15 June 2001 will be allowed to file a class action lawsuit, accusing Tyson of making false statements that pushed the price of IBP’s stock down, reported the Associated Press.
Tyson had tried to call off its takeover of IBP in March 2001, claiming that IBP had not disclosed a federal accounting probe into its subsidiary DFG Foods. IBP responded by taking Tyson to court to force the company to complete its $4.7bn purchase of IBP. During the court case, it emerged that Tyson executives knew about the investigation of DFG when they decided to buy IBP. The chancery court ruled in favour of IBP and ordered Tyson to complete its takeover of the business.
Commenting on the class action decision, Tyson spokesman Ed Nicholson said the company would continue to vigorously defend the suit.
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