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Disney, ABC Settle 'Pink Slime' Lawsuit for $177M

By George Khoury, Esq. on August 14, 2017 6:57 AM

Shakespeare was wrong. A rose by any other name might still smell as sweet, unless that name is pink slime. Then, there's a good chance consumers would never know what it smells like because no one smells pink slime.

Do you remember the news reports about "pink slime" that made the local news circuit back in 2012? How could anyone forget right? Finding out that over half the nation's ground beef contained pink slime was eye opening. But the phrase pink slime didn't win any friends over at Beef Products Inc. who were the ones skewered by the report. Instead, it led to the company hiring some lawyers, filing suit, and winning a sizable settlement from Disney and ABC news.

It's Pink Slime Time

Pink Slime is actually a beef product that gets used in ground beef. It is essentially processed beef scraps that are treated with chemicals to be made safe for consumption. Then, meat packaging and other processing plants, mix it into fresh ground beef as filler.

The ABC news report is alleged to have been reckless with their use of the term pink slime to describe BPI's "lean finely textured beef." BPI sued after the ABC report aired (report has been edited since airing),and caused their sales to plummet. Hundreds of workers were laid off, plants were closed, and the usual sale of 5 million pounds of "lean finely textured beef" or "LFTB" per week dropped to 2 million.

Bigger Risks Means a Bigger Settlement

While the exact figures and terms of the settlement are not known, it is known that Disney, ABC's parent company, paid $177 million in connection to the lawsuit and settlement. Although this figure is rather substantial, it pales in comparison to the actual losses that could have been claimed by BPI with range into the billions. Against that backdrop of risk, clearly Disney and BPI were able to find a mutually agreeable number that made sense.

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