Easterday Ranches files Chapter 11 bankruptcy following Tyson lawsuit

By Sarah Lizee

Olympia, Wash., Feb. 2 – Easterday Ranches, Inc. filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the Eastern District of Washington.

On Jan. 24, Tyson Fresh Meats, Inc. filed a lawsuit against the company, alleging that the debtor’s former president purportedly engaged in fraudulent “forward billing” practices, resulting in Tyson’s overpayment of over $200 million for the purchase and feeding of “non-existent” or “missing” cattle due to the submission of fraudulent invoices and records under a cattle feeding agreement, according to court documents filed Tuesday.

As a result of the alleged fraudulent activity, Tyson reduced its payments to the debtor under the cattle feeding agreement, significantly reducing the debtor’s ability to fund ongoing operations.

In an effort to preserve the debtor’s business operations and protect the cattle in the near term, Tyson has advanced, on a pre-petition basis, some costs associated with the care and feeding of the cattle located at the feedlots directly to the debtor’s vendors or other parties.

The company filed a cash collateral motion, in case Washington Trust Bank, lender of the company’s $45 million revolving credit facility, asserts a lien in any cash collateral of the debtor, including the funds expected to be prepaid by Tyson. The company said that it has not yet reached an agreement with Washington Trust Bank.

The company listed $100 million to $500 million in both assets and liabilities in its petition.

Its largest unsecured creditors are Tyson Fresh Meats, Inc., based in Dakota Dunes, S.D., with an at least $225 million litigation claim, Segale Properties, based in Tukwila, Wash., with an $8.65 million money loaned claim, and Animal Health International, based in Sunnyside, Wash., with a $1.08 million trade debt claim.

Easterday Ranches is a Pasco, Wash.-based cattle operator. The company filed bankruptcy under Chapter 11 case number 21-00141.

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