A US bankruptcy court has delayed a hearing for struggling poultry group Pilgrim’s Pride to retain two of its former executives as consultants.
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Despite the judge yesterday (27 January) approving an employment agreement for Don Jackson to become Pilgrim’s CEO, the company’s bankruptcy trustees said that consultancy payments to former CEO Clint Rivers and ex-COO Robert Wright may violate bankruptcy rules.
The hearing will now be delayed until 3 February.
Rivers and Wright resigned from Pilgrim’s last month, a few weeks after the chicken producer filed for Chapter 11 bankruptcy protection, citing volatile feed costs and high debt.
The company wants to pay Rivers a salary of US$83,000 a month for four months and Wright a salary of $50,000 a month for three months.
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By GlobalDataIn a court filing, Pilgrim’s bankruptcy trustee William Neary claimed that the proposed payments to Rivers and Wright “are designed to induce the former chief executive officer and former chief operation officer to stay for several months performing the exact duties that they performed before they resigned”.
Neary added that “the facts and circumstances of this case do not justify payments of such large amounts of money”.
Jackson’s package includes a $1.5m annual salary, a $3m bonus and stock incentives, the court filing said.
