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Indiana cattle firm may face involuntary bankruptcy

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An Indiana firm under federal investigation for passing bad checks for cattle purchases could find itself forced into bankruptcy proceedings if a judge grants a motion filed by some of those owed money.

The action against Eastern Livestock Co., LLC, came Monday in U.S. Bankruptcy Court in the Southern District of Indiana. Two companies — Southeast Livestock Exchange, LLC, of Waynesville, N.C., and Moseley Cattle Auction, LLC, of Blakely, Ga. — and David L. Rings of Russell Springs, Ky., filed an involuntary bankruptcy motion, claiming they sold Eastern cattle worth $1.45 million and weren't paid.

The petition for involuntary bankruptcy is a mechanism to make sure all creditors receive equal treatment and none are favored, said John Ames, the Louisville, Ky., attorney representing the three.

Eastern has 20 days to object to the motion, and a judge will decide whether or not to begin bankruptcy proceedings, Ames said.

A man who answered a phone number listed on Eastern's website said the company had no comment.

Federal agriculture officials filed a complaint last month against Eastern, accusing the firm of failing to pay for livestock purchases or maintain an adequate bond.

The company's recent trouble began Nov. 3, when a livestock seller complained to the U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration that a check received for livestock sold to Eastern had been returned due to insufficient funds.

Federal regulators say Eastern, one of the largest cattle brokerages in the country with operations in 11 states across the Mid-South, Midwest and West, owes as much as $130 million to more than 700 ranchers and farmers in 30 states.

The USDA has said unpaid sellers may contact it for information on filing bond claims. No hearing on the matter has been set yet.

According to the USDA complaint, Eastern was told in June to raise its bond to $1.15 million from $875,000 before continuing operations. The company didn't but continued to buy and sell cattle, the complaint said.

Eastern mainly bought calves throughout the South and sold them to feed lots in big cattle states, including Texas and Oklahoma, where they were fattened for slaughter.

The bad checks have created financial hardship for many ranchers and could push some toward bankruptcy, said David Scott, president of the Texas and Southwestern Cattle Raisers Association.

In early November, attorneys representing Friona Industries L.P., a feedlot in Amarillo, Texas, filed a federal lawsuit to ensure that Friona and others who bought cattle from Eastern don't have to pay twice — to the producers and to a bank with which Eastern had a loan.

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  • Fifth Third
    What really happened was Fifth Third bank cut off Easterns credit line and they wrote bad checks off of that credit line anyway. One of the company heads is now missing off shore with 30 million dollars.

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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