Hollifield ranch ordered to pay almost $1M to Tyson

Dec 6, 2013

Idaho’s Hollifield Ranches, Inc. (HRI) has appealed a court ruling, claiming the ranch must pay back almost $1 million to Tyson Fresh Meats in overpayments on a cattle feeding contract.

According to court documents, HRI is disputing the Chapter 11 bankruptcy court’s ruling, claiming the packer violated the agreement by not using “reasonable and customary” risk management methods.

Hollifield, based in Hansen near Twin Falls, filed the appeal in U.S. District Court, but unless that court issues a stay, the company will be required to begin making payments while the appeal is pending, according to Tyson’s attorney, Matt Christensen of Angstman, John son and Associates in Boise. Plans call for Hollifield to pay the $958,442 judgment in six payments over three years, starting this December, Christensen told the Idaho Statesman.

Tyson’s contract with Double H Cattle Co., which is now part of Hollifield, began in June, 2010, and was profitable for a time, but cattle prices fell and Hollifield said it lost money, according to court documents.

Tyson Fresh Meats, a South Dakota-based subsidiary of Tyson Foods, filed its claim in March, 2012. Hollifield filed a counterclaim seeking $1.2 million from Tyson, but the amount of damages the company sought changed several times during the court case, according to the judgment.

According to reports, the agreement between the two continued after Hollifield’s September, 2010, Chapter 11 bankruptcy. Hollifield continued to supply cattle for Tyson, but with the market changes, Tyson claimed the settlement price was lower than what Tyson had already paid to HRI.

U.S. Bankruptcy Judge Jim Pappas rejected the counterclaim, which contends Tyson failed to take adequate steps to protect Hollifield from market risks as cattle prices changed. In his Nov. 7 judgment, Pappas ruled that Hollifield breached the contract and “did not prove that Tyson failed to employ reasonable and customary risk management practices.” —Traci Eatherton, WLJ Editor