Complaint filed against livestock company
The U.S. Department of Agriculture has filed an administrative complaint against an Indiana-based cattle brokerage ‘ Eastern Livestock Co. ‘ that the agency says left farmers across the country unpaid for as much as $130 million.
According to the USDA, on or about Nov. 3 the company began issuing unfunded checks to producers for livestock purchased by Eastern.
The USDA’s Grain, Inspection, Packers and Stockyards Administration filed the complaint Friday, Nov. 19, against the company based in New Albany and its owner, Tommy P. Gibson of Lanesville.
The complaint alleges the company failed to pay for livestock purchases or maintain an adequate bond. The bond was held with Cincinnati-based Fifth Third Bank. In November, an Ohio court appointed a receiver to take over the company after the bank froze its accounts and filed a legal complaint that said Eastern defaulted on a $32.5 million loan that was due in October.
The USDA says about $81 million in checks issued on the company’s account have been returned for insufficient funds. It estimates that Eastern owes more than $130 million to 743 sellers in 30 states.
According to agweb.com, the receiver will be working to ensure that the secured creditor, Fifth Third Bank, is paid. After that, unsecured creditors including livestock sellers will be paid with the remaining funds.
Ralph Sherman, a retired tobacco and cattle farmer from Laconia, said he worried about all of the cattle under Eastern’s possession and who would take care of them if the company doesn’t have sufficient funding.
‘They have cattle all over the country,’ he said.
Sherman said many Harrison Countians have done business with the company at some point.
Eastern Livestock Co.’s headquarters is located at 135 W. Market St. in New Albany.
On its website, Eastern is described as one of the largest cattle brokerage companies in the United States. The company began in the 1950s when Gibson began buying and selling cattle with his grandfather. He later joined with his brother, John, to begin expanding their business. The brothers formalized the company in 1982 in Louisville and later opened the headquarters in New Albany. It now has branch facilities in 11 states throughout the United States.
The company purchases cattle at auction and then sells them to feed lots where they gain weight and are prepared for slaughter.
Unpaid livestock sellers have 60 days from the transaction date to file a claim against Eastern Livestock’s bond. To do so, call the USDA’s Midwest regional office in Des Moines, Iowa, at 1-515-323-2579.