Seed firm’s ex-CEO settles claim

Alana Roberts

Friday, May 13, 2005 | 11:16 a.m.

The former CEO of bankrupt Henderson seed producer AgriBioTech and a law firm that previously represented him have reached a $7.1 million settlement with the creditor trustee in the case.

That agreement settles a $14.87 million judgment handed down in January by Las Vegas-based U.S. Bankruptcy Court Judge Linda Riegle. Riegle approved the $7 million settlement Thursday.

The settlement ends all litigation against Richard Budd, the Winston-Salem, N.C.-based former CEO of the seed producer, his family, several business entities and his former legal counsel Womble Carlyle Sandridge & Rice PLLC.

Budd, his family and entities will pay $6 million and Womble Carlyle Sandridge & Rice will pay $1.1 million. The defendants aren't admitting any wrongdoing by settling the case.

Riegle called the settlement "fair," before approving it Thursday.

Budd could not be reached for comment, however his attorney Bill Davis and David Bryant, an attorney for creditor trustee Anthony Schnelling, both declined to comment. The lawsuit has a confidentiality agreement that bars any of the parties from talking about the settlement.

Ford Elsaesser, an attorney for some of the creditors, could not be reached for comment.

Riegle ruled in January that Budd and ABT Group LLC, an entity he established to loan money to AgriBioTech in 1999, were to pay $14.87 million following the bankruptcy. Riegle's January ruling stated that AgriBioTech made a $10 million preferential loan repayment to Budd and ABT Group in June 1999 ahead of other creditors.

The bankruptcy left hundreds of farmers in Idaho, Washington and Oregon, along with other creditors, with $62 million in unpaid debts, Bryant previously said. The company filed for Chapter 11 bankruptcy in January 2000 and a reorganization plan was filed in bankruptcy court in 2001. The company's assets were liquidated as part of that plan.

The settlement must also be approved by a North Carolina bankruptcy court judge. Budd and his wife Sylvia filed for Chapter 11 bankruptcy protection separately earlier this year. Bryant previously said the bankruptcy filings were made as a way to avoid paying the $14.87 million judgment.

The only litigation left pending in the AgriBioTech case is a lawsuit filed in U.S. District Court in 2002 against Budd and the company's accountant KPMG LLP. The litigation against Budd will be settled once approved but the litigation remains against KPMG.

That lawsuit alleges that Budd and KPMG defrauded creditors and investors by misleading them about the financial health of the company. Other company directors, officers, employees and consultants were also defendants in that litigation but have since settled for more than $18 million.