By Jonathan Stempel and Jessica DiNapoli
NEW YORK (Reuters) -Ben & Jerry's on Tuesday sued its parent Unilever (NYSE:UL) Plc to block the sale of its Israeli business to a local licensee, saying it was inconsistent with its values to sell its ice cream in the occupied West Bank.
The complaint filed in the U.S. District Court in Manhattan said the sale announced on June 29 threatened to undermine the integrity of the Ben & Jerry's brand, which Ben & Jerry's board retained independence to protect when Unilever acquired the company in 2000.
An injunction against transferring the business and related trademarks to Avi Zinger, who runs American Quality Products Ltd, was essential to "protect the brand and social integrity Ben & Jerry's has spent decades building," the complaint said.
Ben & Jerry's said its board voted 5-2 to sue, with the two Unilever appointees dissenting.
Unilever, in a statement, said it does not discuss pending litigation, but that it had the right to sell the disputed business and the transaction had already closed.
"It's a done deal," Zinger's lawyer Alyza Lewin said in a separate statement. The sale resolved Zinger's own lawsuit in March against Ben & Jerry's for refusing to renew his license.
The dispute highlights challenges facing consumer brands taking a stand on Israeli settlements in the occupied West Bank.
Most countries consider the settlements illegal. In April 2019, Airbnb Inc reversed a five-month-old decision to stop listing properties in the settlements.
Last July, Ben & Jerry's said it would end sales in the occupied West Bank and parts of East Jerusalem, and sever its three-decade relationship with Zinger.
Israel condemned the move, and some Jewish groups accused Ben & Jerry's of anti-Semitism. Some investors, including at least seven U.S. states, divested their Unilever holdings.
Unilever has more than 400 brands including Dove soap, Hellmann's mayonnaise, Knorr soup and Vaseline skin lotion.
Ben & Jerry's was founded in a renovated gas station in 1978 by Ben Cohen and Jerry Greenfield.
No longer involved in Ben & Jerry's operations, they wrote in the New York Times last July that they supported Israel but opposed its "illegal occupation" of the West Bank.