Owner of bankrupt Oregon dairy seeks permission to sell
SALEM, Ore. (AP) — The owner of a controversial Oregon dairy wants to sell the facility and cattle rather than immediately liquidate the herd as sought by a major creditor.
Greg te Velde, owner of Lost Valley Farm in Boardman, has asked a bankruptcy judge for permission hire a real estate broker to sell the dairy and nearly 7,300 acres for $95 million.
Roughly 8,750 milk and dry cows and 3,380 heifers would be listed for $14 million under the proposed agreement with Schuil & Associates, a brokerage firm specializing in agriculture.
A potential investor may already be interested in the dairy.
During a recent court hearing, an attorney for Washington Agri Investments, a limited liability company based in Spokane, Washington, said the firm is looking at buying the property.
However, Rabobank — which loaned more than $60 million to te Velde — still wants to hold an auction as soon as possible to sell off Lost Valley Farm’s cattle, arguing the herd is losing its worth.
An auction was scheduled for April 27 but was canceled when te Velde filed for Chapter 11 bankruptcy, which automatically stayed all foreclosure actions while he restructures debt.
Rabobank claims that Lost Valley Farm hasn’t kept pace with replacing older cows and is producing less milk than other comparable herds partly due to its “shoestring budget.”
“My collateral goes down in value every day,” said Richard Rogan, attorney for the bank, during a recent court hearing.
The dairy lacks fresh water or bathrooms for employees and has lost its milk contract with the Tillamook County Creamery Association, which will stop accepting milk from the facility at the end of May, he said.
The facility is out of compliance with its court judgment with the Oregon Department of Agriculture over wastewater management and its general manager and animal waste engineer have both resigned, said Rogan.
Meanwhile, te Velde’s own budget projects the dairy will continue losing money, he said. “There’s absolutely no way this dairy can continue.”
For these reasons, Rabobank is asking the bankruptcy court to lift the automatic stay against foreclosure actions as to the Lost Valley Farm dairy.
U.S. Bankruptcy Judge Fredrick Clement, who is overseeing the case, will accept further written arguments on the matter and has scheduled a hearing for May 30 at which he expects to make a decision.
Te Velde owns two other dairies in California that would still be protected against foreclosure under the bankruptcy proceedings — one in Tipton valued at $40 million and another in Corcoran valued at $36 million.
According to his most recently filed financial schedules, te Velde owns $249 million in assets and owes $162 million in debt.
Information from: Capital Press, http://www.capitalpress.com/washington