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Easterday family says ‘vindictive’ Chapter 11 plan punishes creditors
By Sarah Lizee
Olympia, Wash., March 14 – Cody Easterday, Debby Easterday and Karen Easterday objected on Friday to Easterday Ranches, Inc. and Easterday Farms’ disclosure statement for their joint Chapter 11 plan of liquidation, according to court documents filed with the U.S. Bankruptcy Court for the Eastern District of Washington.
The objectors said the plan creates “irresolvable conflicts of interests” between the Easterday Ranches and Easterday Farms debtors.
“Since the original plan was filed in August, debtors have gone backward. They have moved away from an impartial consensual plan that could have been confirmed, and, instead, now advocate theories that would advantage Ranches over Farms,” the Easterdays said in the objections.
“Unsurprisingly then, they have gained the favor of most, if not all, of Ranches’ estate constituencies. However, they have done so at the expense of Farms’ estate, proposing to limit the payment to Farms’ creditors while transferring more than $20 million from Farms to Ranches.”
The objectors said that by proposing the plan, the debtors, the debtors’ counsel and the board of directors are breaching their fiduciary duties to the creditors of Easterday Farms, whose creditors would otherwise be paid in full and to the equity holders of Easterday Farms who are entitled to surplus funds in the Farms estate.
As a result, neither the Easterday Farms’ unsecured creditors committee nor the equity holders are in favor of the plan, the objectors said.
A hearing on the disclosure statement is scheduled for March 16.
Easterday Ranches is a Pasco, Wash.-based cattle operator. The company filed bankruptcy on Feb. 1, 2021 under Chapter 11 case number 21-00141.
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