Dean Foods has announced a proposed settlement that would pay $140 million to dairy farmers in the southeast to settle its portion of a lawsuit that was set for trial next month. Payments would average nearly $20,000 per farm.
The suit involves 7,200 dairy farmers who allege unfair competition and sued both Dean and Dairy Farmers of America (DFA) four years ago. DFA is not party to the $140 million settlement, and continues to prepare for trial set to begin August 16, says DFA spokesperson Kristi Bell.
If the Dean Foods proposal receives preliminary approval by the U.S. District Court for the Eastern District of Tennessee, Dean will make an initial payment of $60 million. It will then make subsequent payments of $20 million in each of the next four years upon final Court approval. The payments will be tax deductible, with the company expecting to take the charges against its accounts in the second quarter of 2011.
The full text of the Dean Foods press release can be read here.
