From the National Cattlemen’s Beef Association.
According to the U.S. Department of Agriculture (USDA), on or around Nov. 3, 2010, Eastern Livestock Company, LLC, (Eastern) began issuing unfunded checks to producers for livestock purchased by Eastern in different markets. Eastern is headquartered in New Albany, Ind., and according to USDA, operates in 11 states across the Mid-South, Midwest and West. It has been reported in the news media that Eastern may owe cattle producers as much as $130 million. USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) has an open investigation on this issue. However, the National Cattlemen’s Beef Association is working with the involved parties and legal counsel to sort through the facts of this issue.
Fifth Third Bank, Eastern’s primary lender and the holder of a perfected general lien on all Eastern’s assets, has initiated an action against Eastern in the state court of Hamilton County, Ohio. As a part of such action, Fifth Third has obtained an Order for the Immediate Appointment of a Receiver. It has been reported that the Receiver, Elizabeth M. Lynch of Development Specialists, Inc., was on premises as of November 10, 2010. Under the receivership order, the receiver is empowered to take immediate possession of all assets and books and records of Eastern. The receivership order contains extensive provisions. Of particular interest will be the provisions that authorize the receiver to either perform or reject existing Eastern contracts “. . . to the extent that the Receiver determines, in her sole discretion, that such performance or rejection will preserve and maximize the value of the [assets of Eastern].” NCBA is reaching out to the Receiver to gather additional information.
According to information on GIPSA’s website, producers who have not received payment due from Eastern are encouraged to contact the GIPSA Midwestern Regional Office in Des Moines, Iowa at 515-323-2579 for complete information on available financial protections and for forms necessary for filing a bond claim on payments due from Eastern. It is important to note that bond claims must be filed within 60 days from the date of the transaction on which the claim is based.
NCBA learned late in the day Friday that USDA will hold a stakeholders meeting on Tues., Nov. 23, 2010, in Washington, D.C., to share available information relating to Eastern. The briefing will cover events that have occurred to-date. NCBA will have three representatives in attendance and will relay new information after the briefing.
NCBA is closely monitoring this situation as well as any effects the Eastern issue may have on cattle marketing. Additionally, NCBA is reaching out to individuals closely involved in the matter to gather additional information and is talking to the appropriate government people involved in the situation and seeking legal perspectives from attorneys.
NCBA is committed to helping producers get information they need, and most importantly, to ensuring safeguards are in place in the future to prevent this from happening again. NCBA will continue sending updates on this issue as more information is learned.
We apologize for any inconvenience. We will provide additional information as it becomes available. In the meantime, if you should have questions, please contact NCBA Director of Communications Mike Deering at mdeering@beef.org or 202-347-0228. He will field inquiries as appropriate
From Gayla Ellison, R&G Trucking and Livestock
My husband and I have been directly affected by the recent unfolds of Eastern’s financial woes and from what I’ve seen and been told by legal professionals, there is nothing we can do. We are Owner/Operators that have hauled Eastern’s livestock. As of right now, we are holding a $2600.00 bad check from East-West Trucking (directly affiliated with Eastern) and they still owe us over $6500.00 for loads hauled in the past 2 weeks prior to the investigation and cease of operations.