Judge delays ex-Pilgrim's Pride CEO, COO contracts

Bankruptcy judge delays ruling on Pilgrim's Pride's consulting pacts with former CEO, COO

FORT WORTH, Texas (AP) -- A bankruptcy judge Tuesday delayed for a second time ruling on consulting agreements with two former executives of Pilgrim's Pride, the nation's largest chicken producer, saying he was "not very happy."

U.S. Bankruptcy Judge Dennis M. Lynn asked court-appointed bankruptcy trustee William T. Neary and the company to submit briefs on the matter by Feb. 12. Lynn did not indicate when he would decide on the agreements.

The pacts with former Pilgrim's Pride Corp. president and CEO Clint Rivers and former chief operating officer Robert A. Wright became an issue when Neary objected to them Jan. 23, saying they seem to violate legal restrictions on severance payments during a bankruptcy proceeding.

After hearing testimony Tuesday, Lynn said Pilgrim's Pride was proposing to buy noncompete agreements and wondered if it was appropriate under other bankruptcy laws.

"I'm not very happy with this arrangement," Lynn said during a hearing in U.S. Bankruptcy Court for the Northern District of Texas. "I don't like it."

Pilgrim's Pride wants Rivers to consult for $83,500 a month for four months, and Wright would get $50,000 a month for three months, according to court documents.

The goal is to keep them from working for competitors, said William K. Snyder, hired as the company's chief restructuring officer a few weeks before it filed for Chapter 11 bankruptcy protection in December.

"Truthfully, you wouldn't pay somebody $83,000 a month to ask them where a file was," Snyder told the judge Tuesday. "The fact is that we're in bankruptcy ... trying to keep as much business as we can. They were the face of the company ... so keeping them out of the marketplace is warranted."

Snyder said Rivers and Wright each have received $143,242 in severance, as part of an agreement that restricts them from spilling trade secrets or talking negatively about Pilgrim's Pride but does not govern work for a competitor.

The Pittsburg, Texas-based company cited volatile feed costs and high debt from an acquisition in filing for bankruptcy protection.