JBS considers defamation lawsuit
Aug. 23, 2013
by Meat&Poultry Staff
Search for similar articles by keyword: [JBS SA
SÃO PAULO, Brazil – JBS S.A. is considering a defamation lawsuit against investment firm OppenheimerFunds, Inc., the São Paulo, Brazil-based meat processor announced Aug. 23.
JBS claims the investment firm has repeatedly spread false information about its dealings with a local subsidiary owned by troubled French poultry processor Groupe Doux. JBS labeled as “false and misleading” any attempt to associate the company's rental of Doux's assets to an acquisition.
“As clearly disclosed to the market, JBS did not acquire the assets of Doux Frangosul,” JBS said in a statement. “The company only rented the facilities in question. If these facilities were left idle, they would have eventually been handed over to creditors in a lengthy legal process. JBS, by keeping the plants operational, has prevented the loss of thousands of jobs and the resultant negative economic impact to local communities.”
Chateaulin, France-based Doux shuttered much of its Brazilian poultry operations in 2012, including two plants in the Brazilian state of Rio Grande do Sul. This left another subsidiary, Doux Frangosul. In May 2012, JBS agreed to lease Doux Frangosul’s facilities in a strategy aimed at increasing its poultry production (it's second only to Tyson Foods, Inc.) and diversifying from beef. JBS is the largest beef processor in the world. As part of the deal, JBS did not assume any of Doux’s debt.
“...any attempt on the part of Oppenheimer to hold JBS responsible for debts assumed by Doux Frangosul is evidence of a profound lack of knowledge of the basic principles of the legal system and represents a crude misinterpretation of the facts," JBS said. "JBS will contest these actions and defend its rights in a vigorous manner.”
Speaking to Bloomberg News, Art Steinmetz, president and chief investment officer of OppenheimerFunds, said the lease violates the investment firm's rights over Frangosul, which is collateral on a $100 million defaulted loan. But JBS said its lease of poultry processing facilities did not interfere with OppenheimerFunds' claims to Doux’s assets as collateral for unpaid debts.
“Oppenheimer is free to take any and all measures permitted by the legal system to recover their investment,” JBS said in the statement. “The rental of the Doux Frangosul plants by JBS does not preclude or jeopardize and course of legal action by Oppenheimer to protect its rights.”
Steinmetz also told Bloomberg that the Brazilian government's 30 percent stake in JBS could be a potential risk for OppenheimerFunds rights as a creditor. OppenheimerFunds is a unit of Massachusetts Mutual Life Insurance Company. JBS strongly denied any government involvement in management of the company.