An agency of the USDA, the Grain Inspection, Packers and Stockyards Administration, or GIPSA, is investigating cattle brokerage Eastern Livestock Co. of New Albany, IN for writing checks on insufficient funds. Eastern Livestock describes itself on its website as one of the largest cattle brokerage companies in the U.S.
Producers who have not received payment due from Eastern are encouraged to contact the GIPSA Midwestern Regional Office, Des Moines, Iowa, at telephone 515-323-2579 for complete information on available financial protections, and for forms necessary for filing a bond claim on payments due from Eastern. Bond claims must be filed within 60 days from the date of the transaction on which the claim is based.
The Iowa Cattlemen’s Association is recommending that:
1. Members who have contracted cattle for delivery to Eastern should seek adequate assurance of performance of the contract from Eastern. Follow the steps outlined below. a. BEFORE SHIPPING THE CATTLE, members should prepare a written letter that:
i. Describes the animals and terms of sale/delivery (include dates of delivery or other contract terms-attach a copy of any written contract information);
ii. Asks for assurance of performance of Eastern according to section 2-609 of the Uniform Commercial Code;
iii. Seeks a response within a reasonable amount of time (There is no specific time frame required by law but what is a reasonable time will be determined by the circumstances of the contract. Obviously cattle are perishable so time is dependent upon what stage the cattle are.)
iv. Includes all of your contact information. b. Email and/or fax the document to the address below with a note: Attention Dave Dufour (counsel for Eastern Livestock, LLC). Send a hard copy via certified mail or some other means to assure delivery. c. DO NOT SHIP THE LIVESTOCK UNTIL YOU HAVE CONTACTED EASTERN AND RECEIVED THE ASSURANCES OF PERFORMANCE. If assurances of performance are not provided, the contract may be cancelled. Contact an attorney before sending contracted cattle to another buyer.
2. If you have received cattle from Eastern but not yet made payment, we suggest you take the following actions: place payment monies in an escrow account according to the terms of the sale and provide written notice of the escrow deposit and terms of the account (including payment of interest or not) to Eastern Livestock Co. with a request for clarification of payment instructions. Notice should be sent by certified mail (or other verifiable delivery method) to the address below. Please DO NOT contact Dave Dufour, counsel for Eastern, requesting information. He is unable to provide any additional information at this point.
3. As always, each situation is unique. For specific questions, please consult your attorney.