Bidders are lining up for a $ 14 million equipment auction in the latest turn of the Easter ghost cattle scam.
There is a fleet of Dodge Ram trucks, tractors, bulldozers, feed mixers, 4 wheelers and even a horse trailer with living quarters for riders. In all, more than 100 trucks of farm equipment are up for auction in one of the largest farm equipment sales ever in the country, let alone in the Northwest.
“I guess what I would tell you is that [this sale] would be unusual in terms of numbers, ”says Max Steffes, an executive at Steffe Group of North Dakota, a large auction house that serves approximately 10 Midwestern states. “It would be unusual to have a $ 14 million sale and not have any property involved, yes. It would definitely be a big auction and get them [farmers] speaking.”
This deal was limited to the big players in agriculture because the bankruptcy creditors wanted to sell it as a whole, says Steffes.
“It definitely limits your market, in terms of buyers,” he says. “There aren’t many people who can write a check for $ 14 million for a range of equipment versus individual end users for each individual asset. Each circumstance is different and warrants a different solution and plan, and in this particular case it doesn’t look like a public auction where each asset is offered individually was in the cards.
Too big to move
In court hearing, Easter days lawyers declared federal bankruptcy Justice Whitman Holt that moving the equipment to an auction house didn’t make sense, as it would be over 100 loads of equipment, mostly oversized.
Easterday lawyers felt that selling everything as a single entity would bring the most value to Easterday’s creditors.
The whole sale takes place because the Easterday family’s many farms and ranches are liquidated in a federal bankruptcy. It was the result of one of the biggest cattle scams in US history. Cody Easterday invented fictional cattle and billed Tyson Fresh Meats for their care and feeding for about a decade. Cody Easterday admitted federal fraud charges, and agreed to reimburse more than $ 244 million in damages. Much of the money was used to fund Easterday’s speculation in the futures market, where it lost over $ 200 million. He faces up to 20 years in prison when he walks past Judge Stanley Bastian in federal court. It’s scheduled for 1:30 p.m. on October 5 in Richland.
“There are a lot of tragic consequences, because as big as it is, it’s a family business,” says Andrea Coles-Bjerre, bankruptcy expert and professor at the University of Oregon Law School. “It’s like a Greek tragedy, this whole family saga. It’s sad to think about how this whole business was built and how high it has reached – the enormity of this thing – and to see it sort of go bankrupt, there’s a lot of sadness at that. “
The stalking horse
The stalking horse’s bidder – or the original bidder who negotiates with the creditors for the equipment – is Blue Tag Farms, LLC. Blue Tag is a discreet entity that lists two Agri Beef employees at the time it contacts two employees of Agri Beef in bankruptcy court documents. Agri Beef is a large Northwest beef company that markets under the Snake River Farms, Double R Ranch, St. Helens and Rancho El Oro brands. The company also exports beef to around 30 countries. Blue Tag / Agri Beef beat four other competitors with the highest bid for the equipment to date – $ 14,021,720, according to court documents. If no other player got higher than Blue Tag / Agri Beef by the end of the day on September 10, then Blue Tag / Agri Beef would win the farming equipment.
To hold its place, Blue Tag / Agri Beef has made a deposit of $ 1,402,172, which will be applied to the purchase price.
Blue Tag / Agri Beef’s offer for all this agricultural production equipment raises the eyebrows of the big agricultural players, as the company is active in beef breeding and packaging – not in the potato sector, onions or wheat. Agri Beef also recently purchased a large feedlot starting on Easter days. The company did not respond to our request for comment.
The purpose of a stalking horse bidder is to ensure that an auction ends successfully – “[the stalking horse] serves as a catalyst to attract better deals, ”according to court documents. For example, the auction of more than $ 14 million from stalking horse bidder, Blue Tag / Agri Beef, secures a floor for the auction. If he was still the top bidder at the end of the day on Friday, Blue Tag gets the equipment for its bid of more than $ 14 million. If Blue Tag is outbid, it will still collect a $ 250,000 breakout fee for its efforts to create the stalking horse auction.
The winner will have to move $ 14 million worth of farm equipment from the former Easterday property by October 31.
Large farm auctions
Large agricultural auctions take place regularly.
Steffes says his auction group made around 600 last year. But he says it’s rare on this scale – just one multi-million dollar batch of farm equipment.
“I can’t think of a time in our 61 year history where we offered lock, stock and barrel a significant range of equipment like this – it just wouldn’t be conducive to an auction in our own way. to do business, ”he says.
Two recent examples of large farm sales: the McMartin Sale North Dakota and Boersen Farms sale outside Michigan. Both were large-scale auctions, encompassing hundreds of thousands of acres, which garnered great interest and Wall Street Journal coverage.