A U.S. Bankruptcy Judge Fredrick Clement ruled that a controversial dairy in Oregon can keep its bankruptcy protections, preventing a liquidation sale sought by the dairy’s main creditor, Rabobank.
Lost Valley Farm won’t have to auction off its cattle and instead will be able to sell them along with the farm and its equipment.
Rabobank sought to foreclose on the dairy herd in an attempt to get back some of the $67 million owed the bank by Lost Valley, but the owner Greg te Velde filed for Chapter 11 bankruptcy to protect himself from creditors like the bank.
Patrick Criteser, The CEO of Tillamook County Creamery Cooperative of which Lost Valley is a member terminated the dairy’s contract back in May because the dairy wasn’t paying its debts and claimed it had violated quality standards more than 60 times by supplying milk with high bacteria levels.
The bank cited wastewater management problems at the dairy which will require expensive remediation, such as emptying and rebuilding manure lagoons, which will run close to $400,000. It also noted te Velde has a substance abuse problem which he acknowledges but says once the business has been stabilized he will be entering a substance abuse program.
Te Velde responded to the wastewater management problems saying he in the process of upgrading the lagoons which contain the wastewater and noted there has never been a spill out of the lagoons.
Te Velde also asked the bankruptcy court to allow him to hire a realtor to sell the business and property. He feels the business is worth more if it is sold as one unit as opposed to piecemeal.