Legal Woes Threaten To Ground Beyond Meats Stock
Plant-based burger maker Beyond Meat is facing a lawsuit from former business partner Don Lee over fraud allegations, saying the company misappropriated its trade secrets and broke a contract. This could hurt its stock rates, according to CCN.com.
Don Lee alleges that it helped Beyond form its trademark beyond meat product using Don Lees own family secret while they were still partners in creating their signature product, the Beyond Burger.
When Beyond Meat left the partnership, it allegedly took Don Lees family secrets with it to the next business relationship. It also reportedly shared those secrets with other competitors in order to achieve the same kinds of products.
Three separate individuals from Beyond Meat are named in the suit: CFO Mark Nelson, Senior Quality Assurance Manager Jessica Quetsch and Director of Operations Anthony Miller. The suit says they conspired to doctor a report that raised significant issues about food safety at Beyond Meats facility.
Court documents show that Don Lee is requesting $682,689 in unpaid invoices for products shipped by Beyond Meat from April to May 2017. The company may also be asked to pay for lost revenue due to the alleged misappropriation of trade secrets.
Don Lee Farms development director Danny Goodman said that the first of their claims has been ruled valid and Beyond Meat had been ordered to pay. The other claims are still to come, but Goodman thinks the judges ruling on the first one is promising. The legal battle will continue in court on May 18 as a trial officially begins.
Beyond Meat went public in 2019, to an uproar from investors it scored vibrant returns and its stocks hit a high of $234 last July as vegan alternatives to beef grew in popularity though that popularity has begun to decline as of late. Beyond Meats sock has come down since last summer, to around $120. But the legal battle, which was mentioned only in a brief note when the company went public and not taken terribly seriously by investors, could change that.
After several months, Beyond Meat might be starting to take the case more seriously, as it hired a new legal team this week.
And while Beyond Meats stock hasnt felt any significant impact from the case yet, that could change as the trial gets closer.