McAfee & Taft AgLINC: The Oklahoma Livestock Owner’s Lien Act By Jeff Todd

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Prior to November 2010, Eastern Livestock Company, LLC (“Eastern”) was one of the largest cattle brokerage companies in the United States. Eastern bought and resold cattle throughout the country under a variety of contractual arrangements. In many cases, Eastern would buy and then immediately ship and resell the cattle. In November 2010, the speed of such cattle transactions proved disastrous to hundreds of cattle producers when Eastern’s primary lender froze Eastern’s accounts, causing millions in checks paid for cattle purchases to bounce.

Eastern was eventually put into bankruptcy which is currently pending in the United States Bankruptcy Court for the Southern District of Indiana (Case 10-93904-BHL-11). Numerous Oklahoma cattlemen were negatively affected by the Eastern debacle. While it could not fix the problem caused by Eastern in 2010, the 2011 Oklahoma Legislature took prompt steps to protect Oklahomans from being put in a similar position in the future. Senate Bill 530, known as the Oklahoma Livestock Owner’s Lien Act of 2011 (the “Act”), quickly moved through the legislature and was signed into law on April 26, 2011. The Act will become effective on November 1, 2011....

Article Authored By McAfee & Taft Attorney: Jeff Todd.

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Published In: Agriculture Updates, Civil Remedies Updates, General Business Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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