According to the Kentucky Department of Agriculture, hundreds of claimants in the Eastern Livestock Co., LLC, involuntary Chapter 11 bankruptcy proceeding will have the opportunity to participate in a global mediation on October 9-10, 2012 in Louisville, Kentucky.  On December 6, 2010, certain creditors commenced an involuntary Chapter 11 proceeding against Eastern Livestock, a cattle brokerage, related to a so-called check-kiting scheme.  The petition came on the heels of Fifth Third Bank’s freezing the company assets and those of its primary owner, which resulted in a subsequent receivership and the filing of the involuntary petition.  In early 2012, Eastern Livestock executives admitted to “falsely inflating the balances of bank accounts held by the company between 2009 and 2010, essentially allowing company officials to buy cattle from producers with nonexistent funds.”  Eastern Livestock’s creditors include cattle farmers, markets, truckers and veterinarians, with claims totaling in the millions.  At least four former Eastern Livestock executives, including the owner, were indicted and eventually sentenced to prison terms (with three sentences withheld on the condition that the individuals would pay restitution) for their actions related to the scheme.  On September 24, 2012, Robert M. Fishman was appointed as mediator by the U.S. Bankruptcy Court for the Southern District of Indiana.

Sources:

Quotation from Justin Story, Farmers will get restitution checks, The Daily News, http://www.bgdailynews.com/news/local/farmers-will-get-restitution-checks/article_b36019d0-99f8-11e1-ad66-0019bb2963f4.html (May 9, 2012).

Janet Patton, Cattle farmers get mediation in Eastern Livestock bankruptcy, http://www.kentucky.com/2012/10/07/2363832/cattle-farmers-get-mediation-in.html (Oct. 7, 2012).

Kevin Eigelbach, Eastern Livestock founder sentenced in fraud case, Business First, http://www.bizjournals.com/louisville/news/2012/06/26/eastern-livestock-founder-sentenced-in.html (June 26, 2012).

Eastern Livestock Bankruptcy (website and trustee’s blog), http://www.easternlivestockbkinfo.com/index.html.