Former executives for Farmland Industries were the big losers when a federal bankruptcy judge ruled the company can take away millions of dollars worth of their benefits, but can’t touch life insurance for 2,200 retired employees.
U.S. Bankruptcy Judge Jerry Venters' ruled last Wednesday that retiree insurance policies are protected while the company is in bankruptcy. Farmland could have the option of cancelling the insurance policies and other retiree benefits after a reorganization plan is approved.
Venters granted Farmland's request to stop payment on about $2 million due to former chief executive officers Harry Cleberg and Bob Honse and two other former Farmland executives. The money was part of the separation packages they were to receive when leaving the company.
In addition, Farmland can reclassify almost $17 million in deferred compensation and retirement adjustment payments owed to 138 current and former professional-level employees. If the program is canceled, those former employees become unsecured creditors.
Farmland officials estimate the ruling means the company, which filed for Chapter 11 bankruptcy last May, would recover $9.7 million instead of the $16.5 million it had sought.
For more information on the bankruptcy case, go to: www.farmland.com
Kansas City Star