Disney pays at least $177 million to settle 'pink slime' case - filing
(Reuters) - Walt Disney Co paid $177 million, in addition to insurance recoveries, to settle the closely watched "pink slime" defamation case against its ABC network by Beef Products Inc., a quarterly financial report shows.
Privately-held BPI sued American Broadcasting Company (ABC) in 2012 for $5.7 billion, saying it and reporter Jim Avila had defamed the company by using the "pink slime" tag, and making errors and omissions in a series of reports that year.
Disney and BPI, which calls the product "lean finely textured beef," came to an undisclosed settlement in June, 3-1/2 weeks after a trial began in South Dakota, where BPI is based.
Disney reported the settlement of the litigation in a footnote to its financial report, saying it was seeking additional insurance proceeds to recover its cash payment.
The financial tables show a charge of $177 million described as being "in connection with settlement of litigation." The figure is not directly linked to the "pink slime" case, but the BPI litigation is the only one Disney specifies in the report.
Reuters could not immediately reach Disney and an attorney for BPI for comment.
In a statement in June, ABC said it stood by its reporting. After the case was settled, Avila said the company was not retracting his stories or apologizing, and his 2012 "pink slime" reports remained on the ABC News website.
BPI's signature product, commonly mixed into ground beef, is made from beef chunks, including trimmings, and exposed to bursts of ammonium hydroxide to kill E. coli bacteria and other contaminants.
A microbiologist formerly with the U.S. Department of Agriculture is credited with having coined the term "pink slime."
ABC settled 'pink slime' lawsuit for $177 million, leaving the beef company feeling 'vindicated'
The phrase "pink slime" turned off customers, the lawsuit claimed. Flickr/USDAgov
Disney's earnings report revealed the company spent $177 million to settle the "pink slime" lawsuit from a story ABC ran about beef in 2012.
Lawyers claim the phrase "pink slime" made Beef Products Inc. lose customers.
The company also laid off 700 workers after the report.
Disney paid Beef Products Inc. (BPI) $177 million to settle the 'pink slime' lawsuit that claimed a story ABC ran in 2012 misled viewers and caused hundreds of layoffs.
On Wednesday, Walt Disney Co's quarterly earnings report revealed that the company spent $177 million "in connection with the settlement of litigation" last quarter.
The case could have resulted in a verdict of as much as $5.7 billion if BPI had won.
In late June, ABC announced it had reached an "amicable resolution" with BPI.
BPI's attorney, Dan Webb, said the settlement "vindicated" the company and its "lean finely textured beef," the product that ABC dubbed "pink slime" in its 2012 reports, according to Hytrek.
"Although we have concluded that continued litigation of this case is not in the company's interests, we remain committed to the vigorous pursuit of truth and the consumer's right to know about the products they purchase," ABC said in a statement.
Lawyers made their opening arguments less than a month ago in a trial that could have resulted in a verdict of as much as $5.7 billion if BPI had won.
In the suit, BPI alleged that ABC misled viewers by calling its lean finely textured beef "pink slime." LFTB is a common ingredient in beef products and is safe to eat, which ABC noted in its reports. However, even with assurances that the ingredient, made from the trimmings of a cow and treated with ammonia to kill bacteria, wasn't dangerous, the phrase "pink slime" turned off customers, the lawsuit claimed.
A worker at Beef Products Inc. AP
"They ignored the proper name," Webb said in his opening argument, according to The Hollywood Reporter. "When you have a major news organization that is calling the product 'slime,' witnesses will say they can't imagine anything worse. It connotes something disgusting, inedible."
BPI said it had to close three plants and lay off 700 workers because of the "pink slime" backlash.
ABC's attorney argued that the "pink slime" reports brought to light that BPI and other ground-beef producers were using a beef product that most customers were unaware they were eating.