Washington ‘Cattlegate’ Continues: Bankruptcy Complicates Creditors’ Claims To Easterday Empire

Updated Feb. 8, 2021, 5 p.m. PT

The Easterday family spread unfurls across the Columbia Basin — yawning onion farms, massive potato sheds, huge swaths of ground cut into pens for cattle and a fleet of employee vehicles and tractors. 

But the Easterday family has other assets: A million-dollar house in Phoenix and a private plane and hangar. 

Since December, Easterday Ranches has been embroiled in an alleged scandalous cattle rustling scheme. The charge: Easterday invented 200,000 head of cattle on paper. Major client Tyson Fresh Meats sued, asking for compensation of at least $225 million for the ghost herd. Days before the lawsuit was filed, the Easterdays sold one of their key properties — a cattle feedlot called the “North Lot” in Franklin County — to a competitor of Tyson for $16 million. 

Last week, the family filed for bankruptcy for the large cattle part of its business, called Easterday Ranches. The bankruptcy could put a strain on the entire close-knit family with influence over much of the Columbia Basin and nation’s agri-business. 

Now, in the latest turn of this case, Easterday Farms has filed Chapter 11 bankruptcy. Easterday Farms is the sister company of Easterday Ranches, both in southeastern Washington. Easterday Farms is a huge farming operation in the Columbia Basin boasting over 18,000 acres of largely irrigated land and many other assets. In court documents filed Monday, Feb. 8, the Easterdays are requesting that the court administer the two bankruptcies together. 

Separately on Monday, Tyson Fresh Meats asked the federal court to order a Chapter 11 trustee for Easterday Ranches – or someone neutral to take over the business until the bankruptcy can be sorted out.

Under federal law, a corporate bankruptcy proceeding stops all collection lawsuits against the debtor. And the federal court will ultimately decide what property is included in the Easterday’s bankruptcy estate, according to state law. 

Andrea Coles-Bjerre, a professor who directs the business law program at the University of Oregon Law School, is an expert in bankruptcy law.

“The bankruptcy does two things: it protects the debtor, gives them a breathing spell to sort its affairs and figure out how it’s going to pay its creditors,” Coles-Bjerre says. “And it also protects the creditors. It stops one creditor from getting a greater share of its debt than any other creditor.”

The rest of the family’s tangled assets may be at risk. Whether these assets are available to creditors will be decided by the federal court. 

“If Easterday Ranches sold anything of value to anyone else,” Coles-Bjerre says, “to another company, and didn’t get roughly the same value in exchange, and were financially underwater when they did it, then whatever they transferred can be recovered by the court.” 

Easterday Ranches sold its “North Lot” cattle-feeding property in Franklin County, Wash., just days before Tyson filed its lawsuit against the ranch. In December, Tyson informed shareholders that an unidentified major cattle supplier had misappropriated funds.

Coles-Bjerre says usually the court would allow the debtor to run its own company as it goes through the process of bankruptcy. But if it’s proven unworthy, because of fraud or gross mismanagement, then a trustee could be appointed to take over. 

Jan Ostrovsky, the former U.S. Department of Justice trustee for the Northwest region, worked on a ponzi-scheme cattle rustling case in eastern Oregon about 20 years ago. Ostrovsky is now retired in Seattle. 

“If you don’t follow the corporate formalities — and if you don’t in fact treat companies as financially separate companies and they are doing business with each other — there is a danger that the companies can be treated as one for purposes of bankruptcy,” Ostrovsky says.  

The Easterdays

The family’s business roots in the Columbia Basin started in 1958. 

“Ervin Easterday moved his family and farming operation from Nampa, Idaho, to southeastern Washington, where he purchased 300 acres of undeveloped land in the new Columbia Basin Reclamation Irrigation Project,” according to the history page of Easterday Farms’ website.

Family members have filed for bankruptcy before: the late Gale Easterday and his wife Karen filed for Chapter 12 bankruptcy in 1987, according to court documents. 

The Easterday family is known for growing potatoes, onions and beef cattle as one of the largest agribusinesses in the Columbia Basin of Washington and Oregon. Courtesy of Easterday Farms public Facebook page

Gale and Karen Easterday had five children who now run multiple businesses: Cody Easterday, who largely runs Easterday Ranches; Cully Easterday, the family’s chief agronomist; Cindy Easterday Goulet and her husband Brian Goulet, who run a construction company in the Tri-Cities, and two large restaurants LULU’s Craft Bar + Kitchen and 3 Eyed Fish; Jody Easterday and her husband, Andrew Wills, who own and operate the packing facilities and storage facilities by Easterday Farms Produce Co.; and Kim [Easterday] English and Scott English, whose family owns English Hay Co.

“It is interesting to see the size of this family, and their holdings as a whole,” Ostrovsky says.

Big family business

The Easterday family has formed a sort of Northwest take on keiretsu, the Japanese term for a conglomeration of businesses working in step to form a strong corporate structure. 

Easterday Ranches, Easterday Farms, Easterday Farms Produce Company, Florentyna’s — the parent company of the two large restaurants — and other businesses are connected to the large agriculture family. Cody Easterday and his father ran Easterday Ranches and Easterday Farms. 

Many of the Easterdays’ businesses are interlaced. One example: LuLu’s restaurant touts on its website: 

“The pork comes from pigs raised by our mom on the family homestead in Block 20, less than 30 miles from the restaurant. A butcher just down the road from the farm has hand cut the pork chops and bacon. The onions and potatoes are grown on our farms, and produce like cherries and asparagus are from local farmers we know and trust.”

“Yeah, that does seem like a pretty brilliant operation where any given piece of the business is an integral part of the whole business structure,” Coles-Bjerre says. “It does make the whole corporate structure stronger — as long as nothing untoward was going on.”  

Here are some of the Easterday family’s top assets:  

Property: 

It’s unclear how much property Easterday Ranches owns or leases for its cattle feedlot business. The family just sold the so-called “North Lot” — a feedlot north of Pasco — for $16 million, according to the Franklin County’s Assessor’s Office. 

The Easterday Farms side of the family empire has now grown to more than 18,000 acres of potatoes, onions, corn and wheat, according to the family’s website. 

Plane and hangar:

The Easterdays own a private plane emblazoned with the Easterday cattle brand on the side. The plane, a Beechcraft King Air 90, flies out of the Tri-Cities. Easterday Farms also owns a 6,500-square-foot airplane hangar at the Pasco airport, at 4220 Swallow Ave, according to the Franklin County Assessor’s office. 

Restaurants: 

LULU’s Craft Bar is a Columbia River waterfront property overlooking a marina. Located at 606 Columbia Point Drive. It’s 8,000 square feet and employs about 50 people, according to the Tri-City Area Journal of Business. LuLu’s uses potatoes, onions and beef from the other Easterday operations, according to its own website. The restaurant is named after Cindy Easterday Goulet’s middle name, the Business Journal says. The Benton County Assessor’s website says the property is owned by G2E2, LLC. 

Three-Eyed Fish is a restaurant on 4109 Westlake Ct, West Richland. It got a major remodel and new kitchen in 2018, according to the Tri-City Herald. It’s also run by Cindy Easterday Goulet. It has a value of $915,200 according to the Benton County Assessor’s site, and is owned by Goulet Properties, LLC.

Storage sheds:  

The Easterday Farms has several storage sheds with multiple bays in south Benton County, Wash., about 12 miles south of Kennewick. They were built in 2011 and 2014. Each packing shed might cost up to $2.5 to $3.5 million each, potato industry experts say. And the curve-roofed sheds are typically made to handle 16,000 to 20,000 tons of potatoes per building. The Benton County Assessor values the property and buildings at $8,275,860. The family also owns other storage sheds throughout the Columbia Basin.

Onion packing shed:

Located at 1427 North First Avenue in Pasco, Easterday Farms owns a modern onion packing shed on prime ground near adjacent to the Pasco rail lines. This property is nearly 62,000-square-feet and is owned by Jodi Easterday, according to the Franklin County Assessor’s website. 

Potato packing shed: 

Located at 5235 North Industrial Way in Pasco, the Easterday family owns a several-year-old modern potato packing shed. 

Florida repack center:

The family bought what it calls a “Repack Center” or factory at 4030 Deerpark Blvd, 100, Elkton, Florida, just south of Jacksonville.

Othello onion center:

The Easterdays say they have an onion packing factory at 323 North Broadway, Othello, Washington, according to the business’ website. But the property is owned by Jacob, Kriston, Kees and Dawn Weyns, according to the Adams County Assessor’s website. 

Boardman, Oregon dairy: 

In 2019, the Easterdays bought the formerly-known-as Lost Valley dairy in Boardman, and 732 acres of agricultural ground in Morrow County, Oregon, for $16 million, according to Mike Gorman, the county assessor. The Easterdays asked the Oregon Department of Agriculture to allow them to run 28,000 cows on the site. But without a permit from the state from the departments of Agriculture and Environmental Quality, the Easterday family still hasn’t been able to populate the dairy with animals. When the dairy previously was permitted for 30,000 cows, it was the second-largest dairy in Oregon on paper. But the dairy never ran the full 30,000 cows. The owner at that time, Greg te Velde, ran afoul of Oregon’s requirements for manure management. The Easterday family has cleaned up the property as of fall 2019, according to Oregon’s Department of Agriculture. 

Personal property: 

Easterday family members also own numerous private homes, and in at least one case, a $1 million second home with 3,594-square-feet in Scottsdale, Arizona.

Editor’s Note: The Northwest News Network reached out to both the Easterday family and its counsel multiple times for this story, but did not get a response by deadline.