Judge Imposes Sanctions on Brakebush Brothers in Poultry Processor Fraud Case


In a recent development, a North Carolina business court judge has ruled in favor of sanctions against Brakebush Brothers, a poultry processor, in connection with a lawsuit with its insurer. The judge’s decision stems from the last-minute inclusion of notes related to the legal dispute, as revealed in court records.

As part of the sanctions, the judge has directed Brakebush to submit an executive’s iPad for a third-party forensic examination, with the associated costs to be covered by the company. This decision comes in response to allegations made by legal representatives for Lloyd’s of London, who asserted that the poultry producer should bear the legal fees for withholding 112 pages of handwritten notes. These notes reportedly provide a comprehensive and chronological account of the fire loss and subsequent reconstruction following a 2017 fire in Mocksville, N.C., which resulted in the facility’s shutdown for several months.

The fire incident occurred during the period when House of Raeford Farms was in the process of selling the plant to Brakebush. Raeford Farms, co-plaintiff alongside Brakebush in the case, alleged that Brakebush misrepresented the extent of the fire damage. Lloyd’s of London, the insurer, filed a countersuit, accusing Brakebush Brothers of insurance fraud. The insurer claimed that Brakebush intentionally misrepresented the scope of the fire damage, targeting policies that would provide excess amounts to support facility improvements and expansion.

The judge’s ruling aligns with Lloyd’s of London’s stance, compelling Brakebush to cover the insurance company’s expenses, including attorney’s fees, incurred in prosecuting the motion and new discovery. This decision underscores the legal consequences faced by Brakebush Brothers in the ongoing fraud case and emphasizes the importance of transparency in insurance claims and legal proceedings.