Feed manufacturer Ridley Inc. has agreed to pay $6 million to settle class action lawsuits arising from the BSE crisis.
The company said in a statement last week the settlement does not admit wrongdoing, but it caps the company’s financial liability in other ongoing cases of farmers seeking damages for losses associated with BSE.
The money will be paid into a plaintiffs’ settlement trust fund.
Suits against Ridley have been filed by cattle producers in Quebec, Saskatchewan, Alberta and Ontario.
In a news release, Ridley chief executive officer Steve VanRoekel said the company will continue to contest any allegations it was responsible for the losses claimed by plaintiffs.
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“Resolving these lawsuits now minimizes the costs associated with defending an already lengthy litigation, eliminates the uncertainty and allows us to move our business forward,” he said.
The lawsuits claim that Ridley and the federal government were negligent in relation to the outbreak of BSE in Canada in May 2003, when an infected cow was discovered in Alberta.
The suits said calf rations sold by Ridley were the most likely source of feed-borne BSE leading to the infection. Ridley says it complied with all the relevant laws and labelling requirements.
Four separate suits have been filed. The one in Quebec is an authorized class action suit but has not yet gone to trial. The ones in Saskatchewan and Alberta have been temporarily suspended and the Ontario suit, which seeks to include ranchers from six other provinces, has yet to be certified as a class action.
While Ridley has settled, the lawsuits are expected to continue against the federal government, and Ridley acknowledged it may face future legal bills that would come out of corporate earnings.
Ridley Inc. is majority owned by Ridley Corporation Ltd. of Sydney, Australia. The Canadian company has headquarters in Winnipeg and Mankato, Man., and is traded on the Toronto Stock Exchange.
Shares have traded between $7.50 and $9 over the past six months. The day after last week’s announcement the closing price was down 12 cents to $7.85.
