City of Clinton, Ark. sues Pilgrim's over closed plant
June 02, 2009
by Bryan Salvage
LITTLE ROCK, ARK — On June 1, the city of Clinton, Ark. sued Pilgrim's Pride Corp. for $28.5 million in federal court charging the company of potentially turning the city into a ghost town by idling its plant there, according to The Associated Press. Clinton filed a complaint against Pilgrim's Pride in federal bankruptcy court in Fort Worth, Texas, and accused the company of trying to manipulate the price of chicken by idling some of its processing plants.
"With its largest and sole remaining employer, Pilgrim's, now evacuated, the city faces a crisis of revenue, bond payments and economic devastation, and as a result of the Pilgrim's evacuation is threatened with becoming a modern-day ghost town," the lawsuit stated. "This serious economic situation is, however, a direct consequence of Pilgrim's illegal purpose in shuttering the Clinton plant and operations."
In 2008, Pilgrim's Pride announced it was idling the Clinton plant as the company struggled with lower market demand coupled with high feed costs. Last year, a tornado also destroyed a boat-making plant in Clinton that employed 45 people.
Pilgrim’s Pride filed for Chapter 11 protection from creditors in December, while it reorganizes its debt. AP relays the city challenged the reasons for the company's decision to seek bankruptcy protection.
"A review of its recent actions toward its growers and poultry communities reveals a far different factual history, and that more accurate history is summarized as a series of attempts to manipulate chicken prices and create illegal preferences, all at the expense of growers and communities that provided Pilgrims with their unwavering support," the complaint states.
Clinton is seeking $8 million in lost wages for the plant's 450 workers and $7.4 million for wastewater and water expansion bonds for facilities that Clinton officials say they wouldn't have constructed if the Pilgrim's plant was not operating there.