The former vice president of operations for NORPAC Foods claims he was shortchanged while other executives received bonuses despite the cooperative’s bankruptcy.

Paul Scott, the former executive, has objected to the processor’s motion to reject a retention agreement contract under which he was to receive six payments totaling more than $100,000.

The former NORPAC cooperative, now called North Pacific Canners & Packers, sought to reject its contracts with Scott and a slew of other entities and individuals under bankruptcy proceedings, arguing the company no longer needed their goods or services.

In his objection, Scott claimed he continued working for NORPAC, helping to sell its facilities and assets after the processor had filed for bankruptcy in August 2019, because he’d been assured the company would comply with the retention bonus deal.

“I do assert that I did everything I was asked to do, including bringing buyers to the table,” Scott said during a recent hearing. “I just feel like I was misled. For others to be compensated and for me — in the 11th hour, even after my last day at work — to be told that this would not be honored is a real insult.”

Scott initially claimed that NORPAC nonetheless sought to live up to its retention bonus agreements with the processor’s CEO, Shawn Campbell, and approximately nine other people.

However, the cooperative’s motion to keep its contract with Campbell was recently rejected by the bankruptcy court because he’s negotiating a new agreement for his assistance with litigation and other issues.

Frank Tiegs, who bought some of NORPAC’s facilities and assets, has filed a complaint accusing the cooperative of overcharging $7 million for bulk goods.

Meanwhile, the cooperative has filed a lawsuit against some of its own farmer members because they sought payment for 2019 crops. Under its proposed bankruptcy plan, NORPAC’s farmer members also won’t receive any funds from its liquidated assets.

Scott nonetheless claims that “one or more executives” have received payments based on deals made before the bankruptcy filing.

The processor also hasn’t provided any rationale for such payments or why executives were changed from employees to consultants, he said.

“NORPAC has paid retention bonuses to a number of its individuals well in excess of the amounts of this bonus,” said Chris Coyle, Scott’s attorney, during a recent hearing.

Attorneys for the bankrupt processor have countered that NORPAC hasn’t sought to keep any retention agreements with “insiders or officers” other than the CEO, and even that deal has since been rejected.

Scott was paid until his employment was terminated at the end of February and he was promised nothing more, the cooperative said.

“There were no assurances given to Mr. Scott post-petition that this pre-petition bonus agreement, that there would be any attempt to assume it,” said Michael Fletcher, the cooperative’s attorney, during the recent hearing.

Rejecting the retention bonus contract with Scott benefits NORPAC’s creditors and the bankruptcy estate, so the decision was based on sound business judgment and is thus allowable, according to the cooperative.

Employees who received “significantly smaller” retention bonuses from NORPAC post-bankruptcy were not “insiders or officers” and the decision doesn’t obligate the company to pay such bonuses to everybody, the cooperative said.

Scott argues the “disparate treatment” he received raises the question of whether NORPAC was actually using sound business judgment or whether the decision was “based on bad faith, whim, or caprice,” he said in a court document. “NORPAC’s conduct to obtain the benefits of executory contracts, but avoid the burdens, particularly while reassuring individuals of their intent to honor those burdens, reeks of bad faith.”

U.S. Bankruptcy Judge Peter McKittrick has scheduled a hearing on the matter for July 17 in Portland, Ore.