Easter sale gets green light in bankruptcy court | Livestock
YAKIMA, Wash. – Two major creditors on Wednesday dropped their opposition to the Easter Farm sale, clearing the way for the Mormon Church to buy a family farm in East Washington reduced by debt and fraud.
Prudential Insurance Co. and Equitable Life Insurance agreed to withdraw their objections during a break in the middle of the hearing in U.S. bankruptcy court in Yakima. In return, they are guaranteed to receive most, if not all, of the millions of dollars owed to them by Cody Easterday, his wife, his mother and their businesses.
The parties, returning from the closed-door conference, presented the deal to Judge Whitman Holt, settling a dispute that threatened to block the $ 209 million acquisition by Church of Jesus-affiliated Farmland Reserve Inc. -Christ of Latter-day Saints.
How the proceeds of the sale will be divided between creditors and the Easterday family will be decided later.
Farmland Reserve does business in Washington as AgriNorthwest and already owns 100,000 acres. He is about to add 18,000 acres, including 12,000 irrigated acres, in Benton County.
Most of the Easter properties line the land of AgriNorthwest, according to the organization affiliated with the church.
“Our successful offering reflects our long-term commitment to Columbia Basin agriculture. We will cultivate these fertile fields for decades to come,” Farmland CEO Doug Rose said in a statement.
The Easterdays filed for bankruptcy in February as Cody Easterday faced a federal investigation that he conspired to defraud Tyson Foods and another company by charging them to buy and feed non-existent livestock.
Easterday pleaded guilty on March 31 to one count of wire fraud and agreed to pay $ 244 million in restitution. He faces jail time and is expected to be sentenced in federal court on October 5. He also faces charges of defrauding the Commodities Futures Trading Commission.
Farmland Reserve has outbid a company associated with Bill Gates for properties commonly known as Cox Farm, Goose Gap Farm, Nine Canyon Farm, River Farm, Farm Manager House and Storage Complex.
The sale will involve dozens of plots owned by Easterday Farms, Easterday Ranches or individual Easterdays. Complex partnerships threatened to block the sale.
Prudential and Equitable had claimed that the proposed bankruptcy sale included private properties not eligible for the free sale of liens in a Chapter 11 bankruptcy, intended to reorganize business holdings.
According to court records, the Easterdays borrowed $ 50 million in 2020 from Prudential to operate their businesses, putting various properties as collateral.
Prudential, in court records, said that with interest, Easter Days owed $ 57 million.
Equitable has said in a court file that it is owed approximately $ 29 million.
Late Wednesday, Prudential formally opposed the sale, echoing an objection filed in June by Equitable. Both argued the judge should block the sale unless Prudential and Equitable are guaranteed to be paid in full, including at a higher interest rate applied to defaulting loans.
The lawyer leading the sale, Richard Pachulski, said the consolidation of the properties would maximize their value and the ownership and attribution issues could be resolved later.
Under the agreement described in court, Prudential and Equitable will be repaid at the higher default interest rate, although Easterday Farms and Easterday Ranches have reserved the right to seek to recover some of the more money. late.
Easterday Farm was founded in 1959 by Ervin Easterday, Cody Easterday’s grandfather. Farmland Reserve has been cultivating in the same area since 1968.
“We have been neighbors of the Easterday family for over 50 years. The close similarity of soils and crops represents a unique opportunity for these lands to be combined almost seamlessly with AgriNorthwest, ”AgriNorthwest vice president Pat Tolman said in a statement.