Legendary Pasco Ranchers File Chapter 11 After Fraud Suit Filed
The issue began over a week ago, when Tyson Foods Inc. sued the Easterday Ranches operation, claiming they were defrauded over $225 million. The suit claimed Easterday Ranches, based out of Pasco, had bought, fed and cared for and provided over 200,000 head of cattle that "never existed."
Easterday has been a Mid-Columbia farming-ranching 'institution' for decades.
Now this week, on Monday, Easterday has filed for Chapter 11 bankruptcy protection.
For a number of years, Tyson reimbursed Easterday Ranches for the purchase and feeding of cattle at the Easterday lots; later the cows would be sent to the Tyson plant in Wallula. However, Tyson officials began to notice what court documents said were discrepancies.
The suit said last October Easterday had 186,000 head of cattle worth nearly $321 million. However, about 200,000 could not be accounted for over the last few years. The suit claims, based in part by admissions from Easterday President Cody Easterday, the company submitted fake invoices that showed cattle and feed that never were purchased.
The suit says it was part of a scheme designed to defraud Tyson. According to court documents and reports, Cody Easterday admitted he came up with the idea to offset heavy losses in the commidities trading market; which were said to be $200 million, according to Tyson's lead attorney.
Washington Trust Bank has joined the lawsuit, concerning collateral and loans in the situation.
Now with Chapter 11 in the picture, reportedly an independent oversight group has been set up to run the Easterday franchise that has not connection to the family.
A temporary restraining order has been placed against Easterday Farms Inc. management to prevent any selling or financial moves other than day to day operations. There had been concerns the family was transferring or selling assets.
A hearing has been scheduled for next week for the next steps in this situation.