Easterday Ranches Files For Chapter 11 in Wake of Tyson Suit
Easterday Ranches Inc. filed for Chapter 11 bankruptcy protection on Monday following a civil lawsuit filed last week by Tyson Foods, Inc., alleging the company defrauded Tyson of more than $225 million related to 200,000 cattle that did not exist. Tyson was joined in the suit on Monday by Spokane-based Washington Trust Bank, to court records from Franklin County, Washington.
At Monday’s hearing, Superior Court Judge Samuel Swanberg approved Washington Trust’s request for a temporary restraining order against a separate entity, Easterday Farms, Inc., to prevent it from selling crops or assets, according to a report in The Spokesman-Review, Spokane, WA.
The filing with the U.S. Bankruptcy Court for the Eastern District of Washington listed Easterday’s 20 largest creditors – including Tyson – with unsecured claims that are owed a total of about $238 million.
Tyson filed suit in January claiming Easterday had billed the company for more than 200,000 cattle that never existed, beginning in 2016. Tyson sought immediate legal intervention to protect another 54,000 Tyson-owned cattle in Easterday feedlots.
For several years Tyson had an agreement to reimburse the Easterdays for the purchase and feeding costs of cattle at Easterday’s feedlots that would then be sent to Tyson’s packing plant in Wullula, WA. Tyson has said Easterday supplied 2% of its annual harvest.
“President Cody Easterday admitted to the fraudulent scheme, and has explained that he concocted the scheme in order to offset over $200 million in losses he incurred in the commodities trading market,” Tyson’s attorney wrote in the complaint.
The Easterday family has operated one of the largest farming and livestock businesses in Washington for four generations, including farming, dairy and thousands of feeder cattle. Easterday also operated two feedyards.
Last week it was revealed that Easterday had sold its “North Lot” with a capacity of 25,000 head for $16 million to AB Livestock of Boise, ID. That sale was completed Jan. 22, just days before the Tyson lawsuit was filed.
Tyson lawyers had previously asked the court to appoint a receiver to oversee the Easterday Ranches operations. However, a Tyson attorney told Judge Swanberg this week that request was moot since the Easterday’s had filed for Chapter 11 bankruptcy protection.
Lawyers for Washington Trust, however, asked the judge to either appoint a receiver or issue a temporary restraining order against Easterday Farms, as the bank seeks to prevent any asset diversion or transfer of funds. Swanberg granted the request and scheduled another hearing for next week.
Related stories:
Tyson Sues Cattle Feeder Over 'Fraudulent Scheme'
AB Livestock Buys Feedlot Entangled In Tyson Lawsuit
