Lost Valley Farm Declares Bankruptcy, Halting Sale

There's just no end to the drama at Lost Valley Farm in Boardman, Oregon's second-largest factory farm dairy.

Today the farm's cows—estimates range from just over 11,000 to as many as 19,000—were scheduled to be auctioned to pay off the $60 million in loans owner Greg te Velde owed to Rabobank, a Dutch agricultural lender. In mid-April a Morrow County judge issued a preliminary injunction preventing te Velde from interfering with the auction, according to an article by the Associated Press, though the injunction left open a loophole that could be used to forestall the liquidation of the herd.

Advertisement for auction.

So late Thursday night, just hours before Friday's auction was to begin, te Velde crawled though that loophole by filing for Chapter 11 bankruptcy protection, a move that stops all foreclosure actions by the farm's creditors. An article in the Capital Press reports that the filing also encompasses te Velde's California dairy operations, Pacific Rim Dairy in Corcoran and GJ te Velde Dairy in Tipton.

"Together, the dairies have more than 40,000 cattle that are listed as potential 'hazard property' that poses a safety threat or requires immediate attention" wrote Capital Press reporter Mateusz Perkowski. "Te Velde’s companies owe between $100 million and $500 million to [nearly] 1,000 creditors and have between $100 million and $500 million in assets, according to the bankruptcy petition."

Cow standing in manure from overflowing lagoon.

One of the creditors te Velde is leaving in the lurch is Morrow County, which county Deputy Assessor Patricia Hughes said is owed more than $360,000 in back taxes.

The Oregon Department of Agriculture (ODA), in a direct message on Twitter, said that it "will continue to monitor Lost Valley Farm weekly by conducting inspections of the facility. ODA will also continue to assess compliance of the stipulated judgement and all of the CAFO Permit conditions. "

I also reached out to Tillamook, which is a major purchaser of the milk produced by Lost Valley. It had not responded by the time of posting, so stay tuned for updates as more information comes in.

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UPDATE: The Salem Statesman-Journal reports that Wym Mathews, in charge of compliance for factory farms at the ODA, told the paper that Lost Valley had been issued two notices of noncompliance for violations of the dairy’s wastewater permit, including manure spills, despite a stipulated agreement settling a lawsuit the state had brought against the dairy for previous violations.

"Te Velde’s Chapter 11 bankruptcy petition, filed April 26 in California, provides an automatic stay of time during which judgments, collection activities, foreclosures and repossessions are suspended and may not be pursued," the article states. "Oregon officials could not say whether it also prevents enforcement of the stipulated judgement. Under the judgment, Oregon has the right to revoke the dairy’s wastewater permit if te Velde does not comply with its terms."

In a subsequent interview, reported in the same article, Matthews appeared to change his story, saying only one notice had been issued, and that "there have been no other enforcement actions taken against the dairy since the settlement."

"'It was a big mistake to give this facility a permit, and ODA should have closed it down months ago after it became clear how badly it was being managed,'" said Ivan Maluski, policy director for Friends of Family Farmers, who was interviewed for the article.

 "'There were so many warning signs that ODA and other decision makers either overlooked or ignored,' Maluski said. 'Where is the accountability? What steps are being taken by ODA and the Governor to make sure this kind of thing won't happen again?'"

Read the series of posts outlining the long history of problems at Lost Valley since it opened just a year ago, including cows standing in manure from overflowing lagoons and a leak in a tank containing dead cows, as well as groundwater pollution, lawsuits from the state of Oregon and creditors, and te Velde's own arrest for soliciting a prostitute and possession of methamphetamine in Benton County, Washington.

My article Big Milk, Big Issues for Local Communities reports on the issues mega-dairies pose to Oregon's air, water, environment and communities. You can also find out Why I'm Quitting Tillamook Cheese and read other coverage about factory farms in Oregon.

Top photo from Google Maps. Photo of cows standing in manure obtained via a public records request by Friends of Family Farmers.