After initially filing for bankruptcy in February last year, the court has confirmed the bankruptcy plan for Easterday Farms, clearing the way to pay several dozen creditors.
Judge Whitman L. Holt of the U.S. Bankruptcy Court in the Eastern District of Washington approved the liquidation plan for debtors and the plan administration to take actions necessary to settle claims totaling $11 million for 65 businesses, with claims ranging from $310 to $4 million.
According to court documents, the largest creditor for Easterday Farms is the McGregor Company, a crop inputs, agronomy and risk management provider in the Pacific Northwest, which is owed $4 million. Other notable creditors include John Deere Financial, at $2.3 million, and DLL Finance LLC, at $1.35 million. The remaining creditors, including financial service companies, equipment sellers, farm supply companies and labor companies, will be paid fully, excluding interest and attorney fees.
Rabo AgriFinance LLC is the lone holdout in finalizing the settlement, but court documents show that the company can continue its claim while other creditors are paid. Rabo AgriFinance is trying to collect nearly $1.1 million and has continually objected to the bankruptcy plan, including the sale of Easterday Farms’ properties for $209 million to Farmland Reserve—a Utah-based real estate group connected to the Church of Jesus Christ of Latter-day Saints. Holt said at the hearing on July 26, while Rabo could “throw a grenade” on the plan, it was not in their best interest.
Holt commended the businesses and counsel for their speediness on the settlement and willingness to work together toward a solution.
“A common trope is that a bankruptcy case is like a giant iceberg, and the judge only sees what’s above water,” Holt said. “Assuming that’s true, I’ve seen quite a bit on the tip of the iceberg, and I can only imagine what you’ve dealt with throughout the entire case underneath the water.”
The bankruptcy plan for Easterday Ranches Inc. is still ongoing. However, court documents detailing the classification of claims show claims from Tyson Fresh Meats for $216 million and Segale Properties for $7.8 million.
Holt anticipates the bankruptcy plan could be settled by the end of the year or early next year, which is “well ahead of many cases that were (recently) filed.”
Cody Easterday, who orchestrated the “ghost cattle” scheme causing Easterday Farms and Easterday Ranches Inc. to declare bankruptcy, also faces a lawsuit filed by the Commodity Futures Trading Commission (CFTC). CFTC alleges Easterday submitted false cattle inventory, purchase and sales figures to the Chicago Mercantile Exchange in two hedge exemption applications seeking permission to exceed the exchange’s speculative position limits and avoid disciplinary action. As a result, CFTC stated in their complaint that Easterday amassed over $200 million in losses over a 10-year period.
The proceedings have been stayed three times and are scheduled before Chief Judge Stanley A. Bastian of the U.S. District Court for the District of Eastern Washington on Aug. 10.
Easterday faces criminal proceedings on Sept. 19 for one count of wire fraud, punishable by up to 20 years. Easterday pleaded guilty to the charge, and the case has been put on hold while bankruptcy proceedings are settled. — Charles Wallace, WLJ editor
