Winning Bid on Easterday Assets: $209M

Mormon Church Group Outbids Bill Gates on Easterday Farm, Ranch Assets

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Farmland Reserve was the winning bidder of the assets of Easterday Ranches Inc. and Easterday Farms, making the winning bid of $209 million. (DTN Graphic by Nick Scalise)

This article was originally posted on Wednesday, June 23. It was last updated with additional information at 11:36 a.m. CDT on Thursday, June 24.

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LINCOLN, Neb. (DTN) -- A company connected to the Church of Jesus Christ Latter-day Saints was the winning bidder for the assets of southeast Washington rancher Cody Easterday, according to court documents filed in federal bankruptcy court. The second-highest bidder was an investment company tied to Microsoft founder Bill Gates.

Back in April, Mesa, Washington, rancher 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.

According to court documents in U.S. Bankruptcy Court for the District of Eastern Washington, Farmland Reserve was awarded the winning bid of $209 million for the Easterday assets.

Farmland Reserve is operated by the Mormon Church. The second-highest bid was for $208 million from 100C LLC, an investment company owned by Bill Gates. According to the Land Report, Gates is the top farmland owner in the United States.

Farm Reserve Inc. is the investment arm of AgriNorthwest. AgriNorthwest is owned by the Mormon Church and operates farms in Benton and Walla Walla counties in southeast Washington.

According to court documents, Farm Reserve Inc. was the stalking horse bidder on the Easterday properties. If Farm Reserve is not ultimately chosen as the winning bid during a court hearing on July 14, court documents show the company would receive a "break-up fee" of 2.75% of the purchase price of the Easterday properties. Farm Reserve also would receive a $1.5 million expense reimbursement.

In addition, court documents show Farm Reserve promised an additional $5 million to Easterday debtors to offset the costs of the Chapter 11.

According to court documents in the criminal case, beginning in 2016 and continuing through November 2020, Easterday submitted false and fraudulent invoices and other information to Tyson and another company.

Easterday received reimbursement from the companies for the purported purchase and raising cattle the company never actually bought.

As part of the guilty plea in April, Easterday also agreed to repay $244 million in restitution, according to the U.S. Department of Justice. He is scheduled to be sentenced on Aug. 4. Easterday faces up to 20 years in prison.

The Commodity Futures Trading Corp. sued Easterday this spring, alleging his company violated the Commodity Exchange Act and CFTC regulations. The CFTC complaint was filed in U.S. District Court for the District of Eastern Washington.

The CFTC's complaint stated Easterday amassed more than $200 million in losses during a 10-year period, trading cattle futures on both his personal and business accounts. Easterday then admitted last fall that he had caused Easterday Ranches to submit invoices for cattle that never existed to cover millions of dollars in those trading losses.

On several occasions, according to the CFTC complaint, Easterday carried positions in live cattle futures that exceeded CME exchange-set position limits and "materially overstated" cattle inventory, purchases and sales.

Tyson Fresh Meats sued Easterday Ranches at the end of January, making the allegations.

The Seattle Times reported last month that an audit done by the Washington State Department of Agriculture of brand inspection records found no discrepancies.

Easterday Ranches filed for Chapter 11 bankruptcy protection on Feb. 1, 2021.

Easterday Farms -- started in 1958 by Cody Easterday's grandparents -- also filed for Chapter 11 bankruptcy protection that same week. Easterday Ranches filed with the court last week seeking approval to sell 22,500 acres of land.

In addition, Easterday purchased a troubled dairy in Morrow County, Oregon, in 2019, housing more than 28,000 cows. The 7,228-acre dairy is not part of the bankruptcy.

In a motion to appoint a trustee in the cases, Tyson said it learned Easterday sold one of its feedlots for $16 million just one week before filing for bankruptcy.

According to court documents, Cody Easterday used Easterday Ranches to enter into a series of agreements with Tyson and another company to purchase and feed cattle.

As part of the agreements, Tyson and the unnamed second company would provide funds for Easterday to buy and raise cattle.

After cattle were slaughtered and sold at market price, Easterday Ranches would repay the costs advanced and retain as profit the amount by which the sale price exceeded the sum repaid to Tyson and the second company.

Click here to read more coverage about Easterday Ranches: https://www.dtnpf.com/…

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

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Todd Neeley