JBS Sued for Manipulating Pilgrim’s Dividends, Reworking Board

Brazilian meatpacking giant JBS SA exploited its dominant stake in Pilgrim’s Pride Corp. to seize value by manipulating the US poultry supplier’s dividends and restructuring its board, according to an unsealed lawsuit.

A pension fund is challenging charter changes pushed by JBS that grew its board control beyond 80%, a threshold triggering significant tax savings when Pilgrim’s issues dividends, including the $1.5 billion special dividend it declared within weeks. JBS had previously spent two years blocking Pilgrim’s from paying dividends—even as its cash reserves ballooned by $1.6 billion—until the opportune moment, the suit says.

Although JBS agreed to share some ...