Swine Farms in Check-Kiting Seek Sale

LINCOLN, Neb. (DTN) -- A Canadian company at the center of an alleged billion-dollar check-kiting scheme at two swine operations in South Dakota and one in Iowa asked a federal court this week for permission to sell the operations.

Alberta-based Sunterra Group is facing more than $36 million in losses according to court documents filed in the U.S. District Court for the District of South Dakota, in its operation of Sunwold Farms Inc., Sunterra Farms Iowa Inc., and Lariagra Farms South Inc.

A court-appointed receiver, Pipestone Management, filed a brief in support of a request to authorize a sale to Arkansas-based The Pork Group Inc.

The Pork Group has offered to pay $15 million for all the pigs owned by the three companies, as well as rolling stock and the assignment of barn leases. Sunterra also had been managing pigs owned by the Pork Group, according to court documents.

"TPG intends to offer employment to all current Sunterra employees that are providing labor for the care and feeding of the pigs at the barn sites," the receiver said in a court filing.

"At closing, or in the weeks following, TPG proposes that Pipestone will enter into a separate agreement with TPG, in which Pipestone will continue to provide management, consulting and accounting support. Compeer has consented to the above basic terms of the proposed sale."

In a complaint filed in the federal court on March 24, 2025, Compeer Financial, the financier of Sunterra, alleged that Sunterra operated a check-kiting scheme during which billions of dollars were "fraudulently transferred" to mask that the three U.S. facilities didn't have enough money to operate.

The South Dakota companies raise about 110,000 swine in 54 barns in and around Yankton County.

The Sunterra facility in Iowa is owned by Canadian parent company Sunterra Enterprises Inc. Sunterra Enterprises is owned and controlled by the Price family.

Sunterra manages about 500,000 pig spaces for Sunwold, Lariagra and other entities.

Check-kiting is a form of bank fraud punishable by up to a $1 million fine and/or 30 years in prison. Check-kiting is the practice of opening one or more accounts in several banks. Checks are drawn on one account and deposited in the other when neither account has substantial funds.

According to court documents, Compeer has valued the collateral of the three operations at about $19 million.

"Pipestone believes, in its business judgment, that the proposed asset purchase agreement with TPG provides the best value for the assets to be sold and there is a benefit to selling all of the assets in a single, integrated package," Pipestone told the court in a brief.

"No other interested party has made a similar offer to purchase all of the assets at the value that TPG has offered. Moreover, inclusion of all of the existing barn leases is important to the sale because that will protect the biosecurity of the pig operations, which gives the lease value."

Sunterra Group filed for federal bankruptcy protection in Canada in March. Sunterra Group is owned and operated by brothers Ray, Art and Glen Price; Ray serves as CEO.

A Compeer lawsuit alleges several counts, including fraud and breach of loan agreements, as well as unjust enrichment, among others.

According to Compeer's complaint, the three facilities in the U.S. were using check-writing features on their lines of credit and farm cash management accounts with Compeer to write multiple checks each day.

Between Jan. 1, 2025, and Feb. 10, 2025, alone, the swine operators issued 474 checks for a total of about $431.3 million. During the same time, they deposited 472 checks into their Compeer accounts for a total of $432.4 million.

Compeer told the court the "simultaneous transfers" occurred nearly daily throughout that period and averaged out to about 18 checks for a total of $16.6 million coming out of the Compeer accounts each day.

Read more on DTN:

"Swine Company Forced Into Receivership," https://www.dtnpf.com/…

"Swine Firms Blame Banker in Check-Kiting," https://www.dtnpf.com/….

Todd Neeley can be reached at todd.neeley@dtn.com

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