Louis Dreyfus Units Must Face Cotton-Futures SuitChris Dolmetsch
Three units of Louis Dreyfus Holding BV of the Netherlands lost a bid to dismiss a suit brought in the U.S. by traders who accused the company of manipulating the cotton-futures market.
Trader Mark Allen alleged in a lawsuit filed in June 2012 in federal court in Manhattan that he lost more than $57,000 because he was forced to pay artificially high prices for cotton. Six other traders later filed suits making similar allegations.
U.S. District Judge Andrew L. Carter denied a motion by Louis Dreyfus Commodities BV, Louis Dreyfus Commodities Cotton LLC, Louis Dreyfus Commodities LLC and other defendants to dismiss the suit in a ruling dated Dec. 20, while granting a request to dismiss one of the plaintiffs’ four claims, for unjust enrichment.
Cotton futures jumped to a record $2.197 a pound on March 7, 2011, after the worst drought in at least a century decimated crops in Texas, the biggest U.S. producer. Prices plunged 58 percent by the end of the year as demand tumbled in China, the world’s largest consumer.
Louis Dreyfus was founded in 1851 as a grain trading company and has since grown into a leader in the global agricultural processing and sales markets, according to its corporate website.
The Dreyfus group declined to comment on the ruling in an e-mail.
The case is In re Term Commodities Cotton Futures Litigation, 12-cv-05126, U.S. District Court, Southern District of New York (Manhattan).