How a fatal listeria outbreak, a plant shutdown and a nasty beef among the founding families has left the billion-dollar deli meat empire in peril.
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Here's your Forbes Daily Briefing for Sunday, September 29th. Today on Forbes, inside the chaos at Borshead. When a recall rocks the food industry as much as the deadly Listeria outbreak linked to a Borshead factory in Jarrett, Virginia has, the CEO or owners typically get in front of the news and try to instill a sense of calm. But the families behind the 119-year-old deli meat purveyor have been oddly silent. The lack of response underscores how secretive Borshead has become. A letter about the recall of more than 7 million pounds of ready-to-eat meat products posted on the company website is signed simply from "Borshead." A lone company spokesperson has been cited in media reports and the company refuses to even confirm who the current CEO or chairman is. It's likely Robert S. Martin, one of the primary owners. According to the Centers for Disease Control, at least 10 people have died and nearly 60 have been hospitalized across some 19 states. Now, in the aftermath of the deadly outbreak, the company that took a century to become the biggest deli meat brand in America is facing an existential threat. With multiple civil lawsuits and talks of a congressional hearing, as well as a Department of Justice Investigation that could come with criminal charges. But the warring families who founded Borshead seem more concerned about a series of petty legal battles over the billion-dollar brand. The Brunkhorse and the Bischoff's, the two feuding families who own Borshead and have been fighting over the ownership since 2021, should be at the center of the recall controversy. Lawyers say that the company could be on the hook for hundreds of millions of dollars in civil claims and criminal charges, which could come with hefty fines and perhaps even some jail time. Borshead declined to comment on current and other potential lawsuits as well as its health procedures. Lawyer Bill Marlar, who's Seattle law firm Marlar Clark, has specialized in claims for food recall victims for the past three decades and filed a lawsuit against Borshead on behalf of a survivor, says, "They better have a lot of insurance or they're going to be pushed into bankruptcy. All of this was completely preventable. They were better at growing listeria than they were at making food for human consumption." Borshead was founded in Brooklyn and is now based in Sarasota, Florida. The company, with $1.3 billion in estimated annual revenue, might have been in a strong position to sell itself before the recall. Delhi meat deals garner some of the highest multiples in the food industry. Hormel, the $12.1 billion in 2023 sales, publicly traded giant, whose brands including Genio, Applegate, and Spam, has paid as much as three-time sales on recent acquisitions. Forbes conservatively estimates Borshead is valued at $1 billion. Collectively, the owners are likely worth more, as it's unclear how much cash the founding families have taken out of the business over the past century. Borshead is owned by a complex structure of trusts, with restrictions on how stock can be bought and sold thanks to a 1991 shareholder agreement. The Bronx Horse and the Bischoff's own 100% of the company, and have historically split it evenly. The 25% owned by trusts for Barbara Bronx Horse, who died in 2020 and was the daughter of Borshead's co-founder Frank Bronx Horse Jr., is what's in question amid the lawsuits. The Bronx Horse's remaining 25% is owned by Barbara's nephew, Frank Bronx Horse III. He's suing his second cousin Eric Bischoff, who wanted to buy Barbara's shares. Bischoff owns a little over 14% of the company. His cousin, Robert S. Martin, and his family, became Borshead's largest shareholders with 35% ownership. Alvina Bischoff, the daughter of Borshead co-founder Bruno Bischoff, took the surname of her husband, which is Martin. According to legal filings and reports, Borshead has been run by Frank Bronx Horse III alongside his cousin Robert S. Martin for years. Martin is Alvina's son. For full coverage, check out Chloe Sorvino's piece on Forbes.com. This is Kieran Meadows from Forbes. Thanks for tuning in. [BLANK_AUDIO]
