Litigation funder Burford wins US court challenge to $50 million Sysco settlement

By Mike Scarcella

WASHINGTON, Feb 6 (Reuters) - Burford Capital BURF.L has convinced a U.S. appeals court to throw out a $50 million antitrust settlement involving its former client Sysco SYY.N, in a case one judge called a "cautionary tale" about the influence of third‑party litigation financing.

A three‑judge panel of the 7th U.S. Circuit Court of Appeals ruled on Thursday that a 2022 email agreement between food distributor Sysco and poultry processor Pilgrim’s Pride was not final and should not have been approved. The panel reversed a lower‑court ruling that said Sysco was bound to the deal.

Litigation funders provide financing to clients in exchange for a part of a case's proceeds. Burford, one of the world's biggest funders, had invested $140 million since 2019 to back Sysco’s antitrust cases, and it objected to the $50 million settlement as too low.

Burford won an order in 2022 barring Sysco from completing the settlement, and Burford and Sysco later resolved their dispute over the deal, with Sysco transferring its rights to the lawsuits to a Burford affiliate.

The 7th Circuit’s ruling means Burford affiliate Carina Ventures can continue pursuing its claims against Pilgrim’s Pride and potentially seek more than $50 million.

Burford welcomed the decision in a statement, saying that “Pilgrim’s attempt to ram through a settlement using procedural gamesmanship was inappropriate.”

Sysco declined to comment. Pilgrim’s Pride did not immediately respond to a request for comment.

Sysco’s antitrust suits accused Pilgrim’s and other meat producers of conspiring to inflate prices. In 2022, a Sysco in‑house lawyer emailed Pilgrim’s accepting its offer to resolve three lawsuits involving chicken, pork, and beef pricing for $50 million. Pilgrim’s sought to enforce the deal in 2023, and won a ruling from the federal court in Chicago.

The appeals court reversed that decision on Thursday, finding that material terms of the agreement remained unresolved when Sysco purported to accept it.

Circuit Judge Nancy Maldonado agreed in a concurring opinion that the settlement was void but warned about the risks of litigation‑funding arrangements, accusing Burford of prioritizing profit over reaching a resolution.

“Having turned the courtroom into a trading floor, and calculated that continued litigation was more profitable than settlement, Burford wrested total control over the settlement of Sysco’s claims,” Maldonado wrote. “This case is a cautionary tale to any party who seeks to fund its litigation through a third party.”

Burford called her statements “extraneous commentary that is not supported by the record or other courts’ engagement with Burford and litigation funding.”

The case is Carina Ventures v. Pilgrim's Pride, 7th U.S. Circuit Court of Appeals, No. 25-1110.

For Carina: Derek Ho of Kellogg Hansen

For Pilgrim's Pride: Christopher Michel of Quinn Emanuel

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