Sysco and Burford Capital Butting Heads Over Litigation Control.
- Food giant claims funder is interfering with antitrust litigation.
- Funder says its client is settling for too little.
- Public dustups over litigation funding are rare.
Photo by Richard Lee on Unsplash
Leading litigation funder Burford Capital LLC and food distribution giant Sysco Corp. are locking horns over the control and use of litigation funds. Burford says Sysco is settling Burford-funded antitrust litigation for amounts that deny the financial company optimal return on its investment. Sysco says the funder has overstepped its bounds and interfered with Sysco’s litigation oversight.
Sysco received $140 million from Burford in part to fund price-fixing lawsuits against poultry, pork and beef producers – complex multidistrict litigation involving hundreds of plaintiffs, dozens of defendants, and related criminal suits brought by the Department of Justice (DOJ). So far, settlements of private antitrust litigation have reached into the hundreds of millions, and DOJ has levied more than $100 million in fines.
Burford, which gets a share of any settlements in the antitrust litigation, says Sysco is settling for too little.
Sysco has sued companies associated with Burford – Glaz LLC, Posen Investments LP, and Kenosha Investments LP – claiming they are meddling in Sysco’s settlement efforts. Glaz, Posen, and Kenosha are all companies which have Burford Capital Limited as the only direct or indirect partner. All three are controlled by Burford and Burford operates as the sole funder of their respective litigation efforts.
Sysco also criticized its attorneys at Boies Schiller Flexner, whom, they say, allegedly spoke with Burford representatives without Sysco’s knowledge.
Sysco says the firm gave into Burford’s demands, an accusation the firm vehemently denies. Meanwhile, Burford has obtained an arbitration ruling blocking Sysco from finalizing any of the price-fixing settlements against the meat producers. Sysco has moved to overturn that order, saying it “violates several of the most fundamental public policies underlying our judicial system, including party control over litigation.” Burford claims Sysco gave it veto power over settlements, but only after the food distributor violated the terms of the investment deal.
This high-stakes kerfuffle raises issues around the role litigation funders play in the cases they fund – a subject critics have hammered on since the inception of the industry. While ethics rules forbid interference by lenders, Sysco and Burford clearly disagree on whether the funder veered out of its lane. Whatever the result, it’s unusual to see disputes between funders, litigants, and counsel fought in broad daylight like this.
According to Custom Market Insights, the global litigation funding market was $12.2 billion in 2021 and is expected to reach $25.8 billion by 2030. In addition to London-based Burford, it lists key market players as Parabellum Capital, Bentham Capital, Juridica Investments, Woodsford Litigation Funding Ltd., and others.
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