Exclusive | LDS church outbids Gates for Easterday farms near Tri-Cities

Four months after the Easterday agriculture conglomerate started collapsing with bankruptcy filings and wire fraud charges, a large swath of its farmland has sold at auction for $209 million.

The winner is the investment arm of the Church of Jesus Christ of Latter-day Saints.

Farmland Reserve Inc. had “highest and otherwise best bid” at last week’s private auction held by videoconference, according to court documents filed this week in federal court.

The property is in the southeast corner of Benton County, along the Columbia River near Wallula Gap.

Documents show the property includes: Goose Gap Farm; River Farm; Nine Canyon Farm; Cox Farm; a farm manager house for employee housing; and a storage complex with potato and onion facilities.

The buyer will receive prime Columbia River water rights, along with all irrigation system permits, mineral rights, buildings and homes, equipment, wind machines and trees, vines and other permanent plantings, show court documents.

A temporary lease agreement will allow the Easterdays to complete the current-year wheat crop harvest, and to market and sell “certain tangible personal property and equipment,” documents said.

That money will be used to pay creditors and parties-in-interest in the Easterday Farms and Easterday Ranches bankruptcy cases.

Gates take backup

Five qualified bidders participated in the June 17 auction, with 100C LLC designated as the backup bidder at $208 million. The company, while based in Delaware, is linked to Melinda and Bill Gates’ Cottonwood Ag Management in Kirkland, Wash.

The bidding started at $193 million with a baseline offer by Farmland Reserve. Bids had to be bumped up in increments of $1 million.

Farmland Reserve is a nonprofit corporation based in Salt Lake City, Utah, and backed by The Church of Jesus Christ of Latter-day Saints.

The auction results still need to be approved by Judge Whitman L. Holt at a sale hearing in mid-July in Yakima’s U.S. Bankruptcy Court.

Any objections to approving the sale of assets must be filed by June 30.

Once final, the closing date must occur by Aug. 31, and preferably by July 31, court documents said. If it does extend into August, the buyer then will be allowed to enter the property for planning and assessment purposes.

While the successful buyer will get all rights, title and interest in and to the soon-to-be former Easterday property, they also will receive it free and clear of any liens or claims, documents state.

Legal troubles

The Easterday cattle and farm operations filed for bankruptcy protection in early February, one month after Easterday Ranches was sued by Tyson Foods for bilking the meat processor out of more than $225 million.

Tyson Foods says Easterday charged the meatpacker for buying and feeding 200,000 cattle that never existed.

In the two Chapter 11 filings, the cattle ranch listed debts of just under $237 million to its top 20 creditors, while the farming side showed debts of nearly $18 million to its top 20.

In March, Cody Easterday — president and chief executive officer of the family’s companies — admitting concocting the scheme to defraud Tyson and another company in what federal prosecutors have dubbed a “ghost-cattle scam.”

The total loss was more than $244 million.

The money was used to offset about $200 million lost in commodity futures contracts trading.

Easterday, 49, faces up to 20 years in prison for his guilty plea to one count of wire fraud, and must pay full restitution for the money he stole. Sentencing is set in August.

He has been ordered not to leave the state of Washington in the interim, and had to surrender his passport to the U.S. Probation Office.

On Wednesday, his criminal attorney filed a motion to modify Easterday’s conditions of release so he can meet in-person with his bankruptcy lawyers next Monday in Portland to follow up on the auction sale.

This story was originally published June 23, 2021 at 2:44 PM.