AUSTIN, MINN. — After a recent arbitration ruling went against Hormel Foods Corp., the company now faces a $70 million payment that would be reflected in operating expenses and accrued liabilities for the fiscal 2023 third quarter.
In a Securities and Exchange Commission filing this week, the company said it received an “unexpected, unfavorable arbitration ruling involving an isolated commercial dispute with a third party,” unrelated to the core business.
On Aug. 15, the arbitrator awarded $59.6 million in damages, plus prejudgment interest of $5.3 million and attorney’s fees to the other party.
A one-time payment is expected to be made by Hormel during the fourth quarter of fiscal year 2023. The company stated in the 8-K document from the SEC that it does not expect the payment to impact Hormel’s continuing operations or long-term financial outlook.