January 26th, 2011

Got Milk Intel Part II: Follow-Up On The Puzzling Dean Foods Settlement Mystery

by Philip Baruth

If you read the Dean Foods post last week, you know that we posed a tantalizing riddle: Why would those who brought suit against Dean for anti-competitive practices in 2009 decide to settle now for what amounts to a pretty-please promise never to sin again? Why wouldn’t those plaintiffs hold out for (lots) more money and a more effectual remedy to the monopoly at issue? Thus far long-time reader Nat Kinney has offered the most plausible theory, based on the freshest intel.

Nat points us to a recent article in Daily Finance, ominously slugged, “10 American Companies That Will Disappear in 2011.” The sub-thesis? That Dean is heading toward disintegration, a frantic spinning-off of its myriad divisions, driven by huge debt and other recessionary pressures.

In this theory, the Washington-based lawyers who brought the class-action suit (including some Vermont farmers) are maybe crazy like foxes, getting a decent chunk of change before the spin-off dries up liquidity, or drives down stock prices.

Which makes more sense than anything else VDB has been able to work out. And so we re-issue our challenge to you out there with dairy connections or serious Google expertise. What can you tell us about the Dean Foods settlement, and why it seems to suck so very much, as settlements go, and so seemingly on purpose?

But until then, Nat wears the milk crown, such as it is.