Easterday Ranch Bankruptcy Sale on Hold
Bankruptcy Court Continues Easterday Request for Injunction Against Rabobank
LINCOLN, Neb. (DTN) -- A hearing to determine Rabo AgriFinance LLC's ability to block the sale of farm and ranch assets of southeastern Washington's Easterday Ranches Inc., was delayed until the end of July.
Easterday asked a federal bankruptcy court to issue a temporary restraining order and injunction against the creditor. Rabobank is trying to collect nearly $1.1 million owed it by Easterday, as the rancher who filed for Chapter 11 bankruptcy protection looks to sell assets.
A hearing on the motion originally was scheduled for July 2, but the court granted a continuance to July 21. According to court documents, Farmland Reserve was awarded the winning bid of $209 million for the Easterday assets.
A hearing on the sale originally was scheduled for July 14 in the U.S. Bankruptcy Court for the District of Eastern Washington.
Rabobank is the lone creditor in the ongoing bankruptcy case that has not consented to a court-approved cooperative agreement between Easterday and its creditors.
Without an injunction, Easterday's attorneys argue in a court filing that the sale of the ranch and relief to creditors would be in jeopardy.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
"If the debtors were to default in seeking or obtaining an injunction against the last holdout, Rabo, and the partners were to terminate the cooperation agreement before the completion of the sales, the financial consequences to the debtors and their estates would be devastating," Easterday said in its motion for a temporary restraining order and injunction.
"Moreover, closing the sale in the coming weeks and confirming a successful plan process in the coming months is dependent upon the ongoing cooperation of the partners. This cooperation is threatened by the continued prosecution of the Rabo action."
A group of six debtors and Easterday negotiated a court-approved cooperation agreement to sell the assets for the highest-possible value.
Five debtors consenting to the agreement are owed about $145 million by Easterday, according to court records. Those debtors include Washington Trust Bank, Tyson Fresh Meats Inc., Prudential Insurance Company of America, Deere and Company and CHS Capital LLC.
A preliminary injunction would prevent Rabobank from continuing its pursuit to collect from Easterday. A lawsuit filed against Easterday by Rabobank in U.S. District Court for the District of Eastern Washington also was put on hold pending the latest delay in the bankruptcy case.
Farmland Reserve is real-estate company based in Salt Lake City, Utah, connected the Church of Jesus Christ of Latter-day Saints. The second-highest bidder was an investment company tied to Microsoft founder Bill Gates.
Back in April, the Mesa, Washington, rancher Cody Easterday pleaded guilty to wire fraud for defrauding Tyson Foods and another unnamed company $244 million in costs for buying and feeding hundreds of thousands of cattle that didn't exist. Easterday, 49, faces up to 20 years in prison.
The criminal case and connected Chapter 11 bankruptcy of Easterday Ranches Inc. and Easterday Farms could lead to the liquidation of an extensive family farm operation in eastern Washington involved in cattle feeding, as well as having 22,500 acres of potatoes, onions, corn and wheat in the Columbia Basin.
More related stories can be found at the following links:
Winning Bid on Easterday Assets: $209M https://www.dtnpf.com/…
WA Rancher Admits 'Ghost-Cattle' Scam https://www.dtnpf.com/…
Easterday Ranch Seeks Court Injunction https://www.dtnpf.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
Follow him on Twitter @DTNeeley
(c) Copyright 2021 DTN, LLC. All rights reserved.