010843 Tricon Sues Burger King Over Deal

Louisville, KY - Tricon Global is suing fast-food rival Burger King Corp., claiming it was shortchanged more than $6 million.

The suit arises from a joint effort by the two companies to support one of their major suppliers, AmeriServe Food Distribution Inc., which filed for Chapter 11 bankruptcy in January 2000.

Tricon and Burger King agreed to lend AmeriServe up to $150 million to operate until the bankruptcy was resolved. Tricon, heavily dependent on AmeriServe to supply food and packaging products to its KFC, Pizza Hut and Taco Bell chains, committed to provide two-thirds of the total.

But Burger King decided to shop elsewhere for supplies and negotiated a deal with Tricon to back out of the agreement. Burger King paid Tricon $30.3 million.

Now Tricon contends that Burger King overestimated the principal and interest AmeriServe owed it because the burger chain had not given its supplier full credit for $36 million of AmeriServe inventory it had sold. Tricon says Burger King should have paid $36.7 million.

Tricon spokeswoman Amy Sherwood said, “We don't comment on pending litigation, but we are confident that we will prevail on the merits of this commercial dispute.”

In a prepared statement, Burger King disputed the Tricon allegations.

“Burger King has honored both the spirit and letter of its May 2000 agreements with AmeriServe and Tricon,” the statement read.

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