West Liberty Foods filed a lawsuit against Blue Apron over a $26 million dispute last month. The dispute is over the meal kit company supposedly failing to pay for half of the cost affiliated with purchasing and operating a free-range chicken company in Arkansas.
West Liberty Foods is suing Blue Apron for breach of contract, fraud, breach of fiduciary duty, and unjust enrichment.
The Arkansas operation was to be split 50/50. West Liberty Foods purchased the operation, now doing business as Crystal Lake Farms, for US$13 million in February of 2017.
BuzzFeed reported that the complaint says the following, “Under the partnership, Blue Apron and West Liberty Foods would share a portion of the profits and would equally share the losses arising from.”
When the agreement between the two companies was made, Matt Salzberg was CEO of Blue Apron. Since the purchase of Crystal Lake Farms, things have gone haywire for both companies. In Junes 2017 Blue Apron went public at US$10 a share, it is now trading at just under US$2.30 a share. Salzberg was replaced as CEO by CFO Brad Dickerson.
What was once the meal-kit giant, Blue Apron, has found itself-having to lay off hundreds of employees.
The same can be said for West Liberty Foods. Buzz Feed reported that according to the complaint West Liberty Foods has sustained about $26,000,000 in losses related to the purchase and its operation of Crystal Lake Farms. Blue Apron has allegedy refused to pay for its 50 percent of the losses.
Due to the significant loss and Blue Apron's alleged unwillingness to cooperate, West Liberty has decided to shut its Crystal Lake Farms poultry processing plant in Jay, Oklahoma, and reduce the workforce at its pedigree farming operation in Arkansas by about 20 people. Operations at the plant are to cease on September 10.
Despite its own layoffs, Blue Apron continues to change its animal welfare standards to keep up with market trends.
As a turkey processor, West Liberty Foods slaughtered 235.56 million pounds of live turkeys in 2017, according to the WATTAgNet Top Poultry Companies Database, making it the 11th largest turkey company in the United States.
