South Korea’s food manufacturer Samyang Foods Co. reached an out-of-court settlement with its U.S. subsidiary Samyang USA to end near $1-billion-dollar legal fight between siblings of the founding family with reparation of $4.1 million.
Samyang Foods - famous for Korea’s first instant noodle ramyeon - announced in a disclosure Wednesday that Samyang USA had filed a lawsuit against the company demanding 1 trillion won ($935 million) in compensation for breaking an exclusive distributor contract, but recently agreed to settle for $4.1 million.
Samyang USA, headed by Samyang founder Chun Joong-yoon’s second daughter Chun Moon-kyung, financially helped out parent company Samyang Foods in 1997 when it suffered from financial troubles during the Asian financial crisis. In return, Samyang Foods entitled Samyang USA as sole distributor of its products in the U.S. for 100 years.
But her brother Chung In-chang upon succeeding to management in 2010 asked to change the contract terms, claiming unfairness. When his sister refused, Samyang in 2013 declared nullification in the contract and began to supply products through other retailers in the U.S.
Samyang USA in 2016 filed a suit against Samyang Foods in a court in California on breach of contract and demanded damages of 1 trillion won. .
The two sides negotiated out-out-court settlement as damages were too great against annual U.S. shipment value of 3 billion won to 4 billion won.
Samyang Foods will wire the money within 10 days to finish off the deal.
Shares of Samyang Foods closed Thursday up 1.43 percent at 84,900 won.
By Lee Hee-soo and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]