Playing chicken?

A class-action lawsuit filed over 7 years ago by cattle producers against a company now owned by Tyson Foods (TSN) looks to be a much bigger problem for Tyson, judging by its 10-K disclosure on Tuesday. In prior filings, Tyson, the world’s largest meat company, described the potential for damages as “in excess of $500 million”. But in Tuesday’s filing, the company changed that number to “in excess of $2.1 billion”. That’s nearly 10 percent of Tyson’s 2003 sales. The suit claims that IBP, a meat-packing company that Tyson acquired in September 2001, tried to control and reduce the price paid for cattle, in violation of a federal law. The trial is set to begin on January 12, 2004. One other interesting tidbit from the Tyson filing: in addition to covering the cost of country club memberships for Tyson’s three top executives, the company is also picking up the tab for CEO John Tyson’s “national club memberships”.