The confidential settlement reached on June 28 between Beef Products Inc., and Disney-owned ABC News is not entirely a secret anymore.
The Walt Disney Company’s quarterly financial filing with the Securities and Executive Commission (SEC) shows a charge of $177 million “net of committed insurance recoveries,” incurred in connection with a litigation settlement.
Disney’s financial disclosures appear to be saying it paid $177 million out of pocket plus the total of its insurance coverage to settle the civil defamation lawsuit of BPI v. ABC News and reporter Jim Avila.
The June 28 agreement ended a jury trial on day 17 in Union County, SD, Circuit Court. Judge Cheryle Gering had set aside eight weeks for the trial.
BPI sued ABC, Avila and others under South Dakota’s Agriculture Defamation Act, seeking $1.9 billion with the potential for triple damages, which would have been $5.7 billion.
BPI claimed it was damaged by a month-long series of reports by ABC News about “lean finely textured beef” (LFTB) ABC referred to the product, used as a less-expensive component in ground beef, as “pink slime” more than 350 times. The network news team did not coin the term. A report in the New York Times introduced the world to the term, which was reportedly first used to describe the beef product in an email written by a U.S. Department of Agriculture scientist.
Fast food and grocery store chains canceled orders for the BPI — with Burger King, Taco Bell and McDonald’s ending their use of LFTB well before the ABC reports.
BPI saw an 80 percent reduction in the company’s business by the time the ABC reports ended. BPI was forced to lay off about 750 workers as it closed down production lines in Waterloo, IA; Garden City, KS; and Amarillo, TX.
The multi-million settlement ended the trial before BPI finished presenting its case to the Union County jury. Details of the settlement were entirely secret until Disney filed its financial report.
ABC News has not retracted any of its reports, which are still available on the network’s website.
Regina Roth, who owns BPI with her husband Eldon, and her daughters reacted to the settlement “with tears of joy,” according to Siouxland press reports.
“ABC made us an offer that we just could not refuse. They had been making offers, but they were nowhere they needed to be. It was enough money for us that we felt vindication,” Regina Roth said, speaking to the Sioux City Rotary Club after the trial.
The future for BPI includes new products, possibly reopening plants in Kansas and Texas, and offering former employees financial assistance.
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