Judge OKs settlement against ADM Japanese companies also accused of price fixing

Regulation

July 20, 1996|By BLOOMBERG BUSINESS NEWS

CHICAGO -- A federal judge yesterday approved a $45.4 million settlement in a class-action suit that charged Archer Daniels Midland Co. and two Japanese companies with fixing prices for lysine, a widely-used protein additive for farm animals.

U.S. District Judge Milton Shadur called the settlement "fair, reasonable and adequate," noting that fewer than 2 percent of the plaintiffs objected to the settlement.

He said the defendants are not liable for attorneys' fees. The other defendants are Ajinomoto Co. and Kyowa Hakko Ltd.

Under the settlement, Decatur, Ill.-based Archer Daniels will pay $25 million and the Japanese companies will pay $10.2 million each.

Ken Adams, an attorney for plaintiffs who objected to the settlement, said his clients were overcharged $150 million to $180 million for lysine from July 1991 through January 1996, the time of the alleged price fixing.

Adams said he based his figures on a report by John Connor, an agriculture economics professor at Purdue University, who said the competitive price for lysine during the alleged price-fixing period would have been 70 cents a pound.

The defendants sold the animal feed additive for up to $1.22 a pound before former Archer Daniels Vice President Mark Whitacre, an FBI informant, told authorities that the company conspired to fix prices on lysine and other products, said Steve Kuney, an Archer Daniels attorney.

The U.S. lysine market is valued at about $250 million a year.

Pub Date: 7/20/96

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