Ridley Inc.

Ridley Inc.

October 31, 2005 09:52 ET

Update on BSE Lawsuits Against Ridley Inc. and Government of Canada

MANKATO, MINNESOTA and WINNIPEG, MANITOBA--(CCNMatthews - Oct. 31, 2005) - Ridley Inc. (TSX:RCL) disclosed in April 2005 that it was named as a co-defendant in proposed class action lawsuits filed in four provinces of Canada. The Government of Canada and Ridley Inc.'s majority shareholder, Ridley Corporation Limited of Sydney, Australia, are also named as co-defendants in the lawsuits. Ridley Inc. is today providing an update on the status of these lawsuits.

The lawsuits seek recovery of damages, including punitive damages, for losses allegedly incurred by Canadian cattle farmers as a result of the international bans on the importation of Canadian beef and cattle following the announcement on May 20, 2003 of the diagnosis of bovine spongiform encephalopathy (BSE) in a cow in Alberta.

There are substantial preliminary legal arguments raised by the defendants which must be resolved prior to any hearing to certify the lawsuits as class actions. Ridley Inc. and Ridley Corporation Limited have filed notices of motion to strike the statement of claim and dismiss the Ontario action. These motions are scheduled to be argued at a hearing in Toronto in November. Ridley Inc. believes that there are reasonable prospects that the actions against it will be struck out but, at this preliminary stage, is unable to provide any further comment as to the likely outcome of any aspect of the lawsuits.

Only after these preliminary legal arguments have been resolved, and only if the lawsuits are certified as class actions, will the courts, to the extent it remains necessary, proceed to address the merits of any factual allegations raised by the plaintiffs. The proceeding in Quebec has been stayed pending a decision in the Ontario hearing to dismiss the claims against Ridley Inc. and the other defendants. The proceedings in Alberta and Saskatchewan are also currently in abeyance.

Ridley Inc. has been examining its insurance position in respect of these lawsuits. As previously reported, all relevant insurers were notified of the plaintiffs' claims and have been kept informed of relevant developments. A number of those insurers have reserved their position, while others have adopted the position that their policies do not respond to the claims, including the legal costs currently being incurred. Based on its analysis and investigations, Ridley Inc. believes there is little prospect of any of the insurers responding favourably under these policies. Ridley Inc. will continue to fund the cost of its defence of the lawsuits from operating cash flow and may take action against the relevant insurers in the event of further developments in respect of these insurance policies and if the prospects of success appear reasonable.

Ridley Inc., (www.ridleyinc.com) headquartered in Mankato, Minnesota and Winnipeg, Manitoba is one of North America's leading commercial animal nutrition companies. Ridley Inc. manufactures and/or distributes a full range of animal nutrition products under a number of highly regarded trade names.

Contact Information