December 2017

Chapter 11 Trustee Pursues Adversary Proceedings

United States - Indiana

Eastern Livestock was the largest cattle dealer in the United States. Operating from a small headquarters in New Albany, Indiana, the family-owned business bought and sold much of the feeder cattle across 11 states. During 2010, gross sales jumped from $1 billion to approximately $3 billion. In November 2010, Eastern’s lender placed a hold on all accounts after it discovered that its debtor had exchanged almost $2 billion in kited checks and phony cattle transactions. An involuntary Chapter 11 petition was filed in 2011 and a trustee was assigned.  

The Chapter 11 trustee pursued dozens of adversary proceedings to gather assets following the debtor's multi-billion dollar check-kiting scheme, with Faegre Baker Daniels representing the trustee in the litigation. During 2012, Faegre Baker Daniels successfully negotiated and obtained approval of a Chapter 11 liquidation plan and, pursuant to the approved plan of liquidation, the litigation helped the trustee return millions to unpaid, unsecured cattle ranchers and other unsecured creditors.

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