A judge has ordered a controversial Oregon dairy not to interfere with the liquidation sale of its cattle herd to satisfy the demands of a creditor.
Morrow County Circuit Judge Jon Lieuallen has entered a preliminary injunction requiring Greg te Velde, owner of Lost Valley Farm in Boardman, to cooperate with the preparation of an auction scheduled for April 27.
The injunction was requested by Rabobank, a major farm lender that filed a lawsuit seeking to foreclose on the dairy’s assets, which serve as collateral for $60 million in defaulted loans.
However, it’s possible the preliminary injunction won’t be the last word on the proposed auction of 10,500 cows and 4,000 replacement heifers, which is to be conducted by the Toppenish Livestock Commission.
Lieuallen said the order doesn’t prohibit the dairy from filing a petition for bankruptcy protection from its creditors.
The dairy’s obligations to cooperate with the auction would be suspended if the company files for bankruptcy protection, unless Rabobank obtains relief from the automatic stay on debt collection, the judge said.
Lost Valley Farm was controversial even before it began operating a year ago, with environmental groups and others arguing the facility will cause air and water pollution.
Citing unauthorized manure discharge and other violations, the Oregon Department of Agriculture fined the dairy more than $10,000 earlier this year and then filed a lawsuit to stop the facility from generating waste — which would effectively shut down its operations.
That lawsuit was settled when the dairy agreed to generate less than 65,000 gallons of waste a day and maintain open capacity in its manure lagoons.
Lost Valley Farm’s troubles convinced the Tillamook County Creamery Association to terminate a milk-buying contract with the facility.
Even so, Tillamook has continued to buy milk from the dairy to avoid the “environmental and animal health risk” of suddenly halting its operations, though the creamery is requiring additional safety testing.