US meat processor Smithfield Foods has announced that it has settled the US Department of Justice’s civil suit against the company related to the 1998 and 1999-2001 acquisitions of shares of IBP.
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The suit, filed on 28 February 2003, was seeking US$5.48m in civil penalties. As part of the settlement, which includes no admission of wrongdoing by Smithfield, the company has agreed to a payment to the government of $2.0m.
The Justice Department suit related to whether the company was required to make a filing under the Hart-Scott-Rodino Act in connection with its purchase of IBP stock during the relevant periods. Smithfield believed that it was eligible for an exemption from such filing, because its purchases during such periods were solely for investment.
“Although we remain convinced that Smithfield complied fully with the law, we agreed to settle the matter to avoid the risk and expense of further litigation,” said Richard Poulson, executive vice president and senior advisor to the chairman. “The cost to defend ourselves against the federal government in this matter were expected to far exceed the amount we agreed to pay in settlement. Smithfield is pleased to have this matter resolved and to be able to maintain its focus on delivering value to Smithfield’s customers and shareholders.”
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