USDA's Grain Inspection, Packers and Stockyards Administration has filed an Administrative Complaint charging Eastern Livestock Company, LLC, and Tommy P. Gibson of New Albany, Ind., with: Failure to pay for livestock purchases; Failure to pay timely for livestock purchases; and Failure to maintain an adequate bond. Eastern is one of the largest cattle brokerage companies in the United States, with operations in 11 states across the Mid-South, Midwest, and West.
GIPSA is on the scene and has estimated that Eastern owes more than $130 million to 743 sellers in 30 states. So far, the agency has documented $81 million in returned checks. The agency is also investigating possible violations of the Packers and Stockyards Act, and working to ensure that all available protections are afforded to producers.
The Hamilton County Court of Common Pleas in Ohio has appointed Elizabeth M. Lynch, of Development Specialists Inc., of Cleveland, Ohio, as receiver to work on behalf of Eastern's creditors, among which Fifth Third Bank is the secured creditor. The court also granted a temporary restraining order enjoining Eastern's access to and dissipation of its financial assets.
The receiver will be working to ensure that the secured creditor is paid. After the secured creditor, the bank, is paid the unsecured creditors, including livestock sellers, will be paid out of remaining funds.