Trustee Explains Eastern Livestock Finances

A stuffed longhorn bull, sporting a faded blue Eastern Livestock Company baseball cap, overlooks a wood boardroom table in the troubled cattle brokerage's headquarters. One of three lawyers at the table jokingly asks bankruptcy trustee Jim Knauer if he'll get to take the bull home with him when the company is dissolved. Another lays claim to the hat. The men had just come from a court hearing in which Knauer explained that it's unlikely Eastern Livestock's unsecured creditors -- mostly ranchers, livestock markets and cattle trucking companies -- will see a dime when Knauer's job of unraveling the company finances is done. Unlike whoever takes the stuffed bull home, the cattlemen's only mementos for their dealings with Eastern will likely be bad checks, bruised wallets and new livestock marketing rules. Once a trusted name in the livestock brokerage business, Eastern Livestock Company may now be one of the most loathed. In late October 2010, Fifth Third Bank, Eastern Livestock's primary bank, froze the cattle brokerage's accounts. That caused $130 million of worthless checks to be sent to more than 700 ranchers and livestock markets in 30 states. Since then, the Packers and Stockyard Administration's bond process and the industry's payment and contract practices have all faced heavy scrutiny as cattlemen look for ways to protect their businesses from future failures...more