Eastern Livestock LLC

[Oldtimer]

CHICAGO, Nov 12 (Reuters Legal) - The U.S. Agriculture Department is seeking a temporary restraining order that could halt operations at Eastern Livestock Co LLC of New Albany, Indiana, a business under investigation over allegations that it failed to pay up to $130 million in bills, the USDA said on Friday.

No charges have been filed against Eastern Livestock. The investigation by the USDA's Grain Inspection, Packers and Stockyards Administration began last week following seller complaints over unpaid bills.

The USDA said the $130 million included $81 million in checks returned by banks.


http://westlawnews.thomson.com/National ... ttle_firm/

Heres one of the suits filed:

http://dockets.justia.com/docket/texas/ ... 66/201090/

Includes Superior and several others as Defendants...

I wonder if this will spell the death knell for Superior Livestock? They've been in financial problems for the last couple years- and their sales have dropped dramatically... :???:

 

[kickinbull]

not sure about Superior, but there is an Eastern Livestock buyers station in the local community. I know of a few neighbors holding cold checks, and no cattle. Not good.

 

[kenny thomas]

kickinbull, I heard that there was almost a riot there at the buying station on Tuesday. They had to call the law to keep peace. I know of a few people that this will put under before it can get settled even if they make all the checks good later on. I know one buyer that they owe over a million.

 

[tom4018]

not sure about Superior, but there is an Eastern Livestock buyers station in the local community. I know of a few neighbors holding cold checks, and no cattle. Not good.

You talking about Edmonton? Hears of one guy that had a $8,000 bad check.

 

[kickinbull]

not sure about Superior, but there is an Eastern Livestock buyers station in the local community. I know of a few neighbors holding cold checks, and no cattle. Not good.

You talking about Edmonton? Hears of one guy that had a $8,000 bad check.

Yes it was Edmonton. I heard of 3 guys I know holding cold checks.

 

[kickinbull]

this is total sh?t. law suits are being filed, so what. What about COOL or animal ID? can't those cattle be traced back to rightful owner and given back, that all my neighbor would like. Or does that only work not for proof of ownership but liability?

 

[kenny thomas]

In the 90's Eastern was said to be in financial trouble and sold to E-Merge. E-Merge went under after just a few years and Tommy Gibson (the former owner of Eastern) started back up using the Eastern name again. Looks like a long term problem that is now catching everyone.
I have been told that they were shipping about 100 loads a week when this happened.

 

[kickinbull]

Just read on another site that only debtors with collect any $$ left in the bank. Cattle sellers will get a percentage of the bond. Easterns bond total was $875,000. Divide that by $94 mil in bad checks comes to about 0.0085/1000.

 

[kickinbull]

I have checked with CNN, MSNBC,FOX and a local tv station and cannot find anything on about the scam. With the losses to the families of those who sold cattle and how that will have an effect on the economy it's being kept quiet. It is ......wrong.

 

[Oldtimer]

Its long been known that the GIPSA rules needed to be strengthened and brought up to date to meet this much faster paced/priced trading world- including issues like the amount of bonding for buyers, brokers, and salesbarns...

And that the GIPSA folks needed to be given some bigger "teeth" for oversight and enforcement-- to prevent another Wall Street type bust...

I think that is the reason Congress in the last Farm Bill asked USDA for a strengthening of GIPSA--which Secretary Vilsack is/has been trying to do-- but that has been fought and opposed at every step by some big money interests in the industry...
Its just sad- that in order to see the loopholes- so many of the producers that are the little guys are again going to be those that suffer the hardest...

 

[Stocker Steve]

Its long been known that the GIPSA rules needed to be strengthened and brought up to date to meet this much faster paced/priced trading world- including issues like the amount of bonding for buyers, brokers, and salesbarns...(

How do you get 130 million behind in a rising market?

 

[Busterz]

bad hedges and/or speculating on commodities ???

 

[Waldershrek]

That's all the financial world is today.....make believe. Paying for things with money that ain't there and speculating about things that may or may not happen.

 

[Oldtimer]

Too Big to Fail Strikes Agriculture



Source: Organization for Competitive Markets

Nov 23, 2010



Lincoln, Nebraska: The American economy is now pockmarked with evidence of economic landmines—leaving huge craters after each and every "too big to fail" episode.



Banks, auto manufacturers, airlines, and industries across the economy have been devastated largely because of concentration of market power in few firms and management arrogance that each is too big to fail.



Until now, agriculture seems to have drawn an exemption from the process. But, the latest crater left from a detonated large firm's failure is in the cattle business.



Eastern Livestock LLC, New Albany, Indiana, is a big name in cattle country. Eastern's business—matching buyers with sellers of calves big enough to leave the ranch and enter feedyards—was the dominant company in the industry. It may have handled nearly onethird of all US cattle.



According to papers filed in court in Indiana, Eastern's revenue tripled during the past year. But, this was because it was trading with itself—kiting checks so its money movement looked like it was three times the true volume. The banks caught on, stopped the check kiting, and Eastern collapsed.



The Grain Inspection Packers & Stockyards Agency ("GIPSA"), a USDA agency responsible for oversight of cattle traders, has been on the spot. GIPSA audited Eastern in 2010 and was trying to regulate the firm.



But GIPSA's authority is very limited. The maximum bond it could require to protect unpaid livestock sellers was $875,000—less than one percent of the total estimated losses caused by Eastern's demise.



GIPSA is in the process of issuing new rules to regulate the marketplace. The proposed rules would have only a modest effect on a firm like Eastern, but they have drawn the ire of big players in the cattle, hog, and poultry industries. The biggest packers and producers call the proposed new regulations "draconian" and claim they will "set the meat industry back 50 years."



OCM's General Counsel, David A. Domina said: "Too big to fail is simply not working; too big to fail is a failure in and of itself. The collapse of this massive firm is going to be devastating to thousands of cattlemen, sale barns, truckers, ranch hands, and many others.



It may take years to sort out the full scale of devastation. We cannot allow this kind of concentration to continue."



Eastern Livestock's business is now in the hands of a court-appointed receiver. All indications are the firm's principals can expect more, and more complex, legal problems

to come.



competitivemarkets.com