In a filing with the U.S. Securities and Exchange Commission (SEC), Hormel Foods revealed that it will pay about $70 million as a result of an arbitration ruling.
“On August 15, 2023, Hormel Foods Corporation (the Company) received an unexpected, unfavorable arbitration ruling involving an isolated commercial dispute with a third party not related to the Company’s core business. Pursuant to the ruling, the arbitrator awarded $59.6 million in damages, plus prejudgment interest of $5.3 million and attorney’s fees, to the counterparty payable by the Company. The estimated pre-tax impact of the adverse arbitration ruling of $70.0 million will be reflected in operating expense and accrued liabilities in the fiscal 2023 third quarter financial statements,” the filing stated.
The company said the one-time payment is expected to be made in the fourth quarter of fiscal year 2023, which began earlier this month, and that it does not expect that payment to have an impact on the company’s continuing operations or long-term financial outlook.
The third party involved was not identified.
Jacinth Smiley, chief financial officer of Hormel Foods, signed the document, which can be found on a Form 8-K on the Hormel Foods Investor Relations webpage.
Hormel Foods, headquartered in Austin, Minnesota, is a global branded food company and is the parent company of Jennie-O Turkey Store, the second largest turkey producer in the United States.
