Latest news with #Compeer
CBC
10-04-2025
- Business
- CBC
Sunterra takes steps toward creditor protection while U.S. subsidiaries face legal scrutiny
Several businesses under the Sunterra banner, known in Alberta for its agriculture and high-end grocery operations, have taken steps toward creditor protection as three of its U.S. subsidiaries face legal and financial scrutiny. Late last month, Sunterra Quality Food Markets, Sunterra Food Corporation, Sunterra Farms, Trochu Meat Processors and Sunwold Farms all filed notices under the Bankruptcy and Insolvency Act, a process that gives financially strained companies 30 days of protection from creditors while they come up with a plan to restructure. Trochu is where Sunterra processes its pork in Alberta. The facility was damaged in a fire last summer and has not yet reopened. Sunwold Farms is a pig operation in South Dakota where Sunterra sends pigs to be finished. "Please be advised that the company is not bankrupt and has availed itself to a procedure whereby an insolvent person, with creditor and Court approval, restructures its financial affairs," said the insolvency trustee, Harris and Partners Inc., in letters to creditors for each of the five entities. Documents show each of the five entities owe millions of dollars to creditors, though some of that includes money owed to one another. For example, Sunterra Farms Ltd. owes just over $3 million to Sunterra Food Corp., and Sunterra Food Corp. owes $4.9 million to Sunterra Farms Ltd. Meanwhile, a Midwestern farm credit cooperative has alleged breach of contract and fraud against three of Sunterra's U.S. subsidiaries. Since 2002, Sunterra has been shipping pigs to northwest Iowa and South Dakota to finish growing, according to the company's website. The claims against Sunterra Farms Iowa, Sunwold Farms and Lariagara Farms South (another pig-finishing operation in South Dakota) are related to an alleged "cheque kiting" scheme in South Dakota, court documents show. All three entities have the same parent company, Sunterra Enterprises Inc. Cheque kiting refers to the process of depositing cheques from one account with insufficient funds into another, to temporarily make a bank balance seem inflated. According to Compeer Financial, the companies were sending multiple cheques every day via next-day mail to be deposited with Canada Western Bank. At the same time, they were also sending Compeer multiple cheques, drawn against the Canada Western Bank account. "In other words, Defendants were sending nearly identical amounts and numbers of checks back and forth between CWB and Compeer daily," said the court documents. Compeer alleges the cheques purposely didn't exceed $1 million to avoid scrutiny. It's alleged that the companies collectively owe $35,259,796 to Compeer and have $19,017,724 in collateral. Given the apparent financial strain, Compeer has suggested that the companies can't afford to properly feed and care for 110,000 pigs that are being used as collateral on its loans. "[An assessment officer for Compeer] testified that Defendants' pigs lack feed and veterinary care," the court documents say. "[He] added that propane was running low, which is used to heat the barns that house Defendants' pigs." The companies, for their part, said Compeer was facing a self-inflicted problem because it controlled the "purse strings" and was trying to "turn off the taps" to cause an emergency, the court records show. "Asking for Compeer to "keep the taps flowing" while Defendants' accounts are overdrawn tens of millions of dollars due to Defendants' alleged fraud is an untenable argument," a South Dakota judge wrote in his discussion of the case. On March 28, the judge granted Compeer's motion to avoid mediation in the case and to appoint a receiver. Sunterra has not responded to an interview request from CBC News. A spokesperson for Compeer declined to comment. The Sunterra company started with a small family pig farm operated by Stan and Flo Price in Acme, Alta. In 1970 the company began a pig-breeding business, Pig Improvement Canada (now known as Sunterra Farms). In 1990, it launched pork processing in Trochu and Sunterra Market retail locations in Calgary. In 1990, the company told the Calgary Herald it had invested in a specialty slaughterhouse in Trochu and retail stores in Calgary to sell "superior, 'uniform-quality' meat" from "genetically improved herds" to the public.
Yahoo
09-04-2025
- Business
- Yahoo
Receiver seeks access to ‘missing' financial data amid check-kiting claims
(Photo by Kent Becker, U.S. Geological Survey) A financially troubled Iowa company is operating under a court order to show it did not attempt to destroy or manipulate financial data sought by a court-appointed receiver. In March, the Iowa-incorporated company Sunterra Farms Iowa, and its affiliates, Sunwold Farms Inc., and Lariagra Farms South Inc. were accused in U.S. District Court by one their lenders, Compeer Financial, of operating a billion-dollar check-kiting scheme. Compeer Financial is suing the three companies, which are run by the Price family of Yankton County, South Dakota. The companies are responsible for extensive swine operations in Iowa and South Dakota, with their parent companies based in Canada. At Compeer's request, a federal judge has appointed a receiver, Hannah Walkes of Pipestone Management II, to take control of the companies' operations and ensure that Compeer's collateral – 110,000 head of swine located in 54 barns in and around Yankton County – are fed and cared for. Walkes told the Iowa Capital Dispatch on Wednesday the pigs, which are destined for slaughter, are being properly cared for and are no longer at risk. The swine — which are in various stages of growth and are owned by either Sunterra or Lariagra — are among 500,000 hogs managed by Sunterra Farms Iowa. In its lawsuit, Compeer claims that the Price family companies have engaged in a 'long-running fraud' that involves check-kiting — a fraudulent practice in which a company draws checks from one bank account for deposit in another bank account that it controls, when neither account has sufficient funds to cover the checks. The process takes advantage of the delays in processing checks between banks, allowing one account or another to continually show credits for funds that have yet to be collected. Compeer alleges the transactions have had the effect of creating phony positive account balances that caused Compeer to pay the companies interest. Compeer claims that before the check-kiting scheme collapsed in February, it involved 'billions of dollars' in fraudulent transactions between accounts with Compeer and Canadian Western Bank. According to separate court filings by Canadian Western Bank in the Court of King's Bench in Alberta, the 'core guiding minds' of the defendant companies are CEO Ray Price, along with Douglas, Glen, David and Art Price — all of whom are directors and shareholders of various members of the Sunterra group of companies. According to the Canadian bank, the Price companies issued checks that vastly exceeded their actual holdings — meaning none of the companies, at any point, had the actual cash on hand to pay the face value of the checks. The total amount of money circulated as a result of the alleged check-kiting scheme over a nine-month period exceeded 7 billion Canadian dollars, or 4.9 billion American dollars, the bank claims. In Canadian court filings, Canadian Western Bank alleges that at a meeting on Feb. 24, 2025, Art and Glen Price 'made various clear and unequivocal statements' indicating the overdrafts were caused by CEO Ray Price, with whom they were 'upset and disappointed.' Not long after that meeting, however, the Price family allegedly refused to allow Compeer and the Canadian bank to share information as they investigated the matter. While case in Canadian court has advanced, conflicts have arisen in the U.S. District Court proceedings involving Walkes, the newly appointed receiver tasked with taking control of the Price family companies. According to documents filed with the court by Walkes, she went to the Sunterra Farms Iowa offices in Beresford, South Dakota, on the morning of March 31 to gather financial information. She alleges that while she was logged onto Sunterra's online accounting platform, she noticed 'all information regarding accounts receivable, accounts payable and general ledger were missing.' A short time later, she told the court, she received 'a message that we had been entirely kicked out of the accounting platform.' After logging back in, she alleged, she discovered that information — including data she had previously accessed — was missing. 'I have serious concerns that the data is being destroyed or manipulated,' Walkes told the court, asking that the Price family companies be required to show cause as to why they shouldn't be held in contempt of court. Court records show an attorney for Walkes sent an email to Sunterra's lawyers, stating, 'Someone knew that the receiver was on site and reviewing accounting information, and information and data started disappearing at the same time, which is a direct violation of the court's order.' An attorney for the Price companies wrote back to Walkes' attorney, questioning those claims and asking, 'Will this type of aggression take place at every turn or will the receiver act in the best interest of all parties as it is required?' Four days later, Walkes updated the court on the situation, indicating some of the issues had been resolved and that while she still didn't know whether some data had been removed, she believed she had gained access to enough information to manage the accounts for two of the three companies — Sunwold and Lariagra. However, she told the court, with regard to Sunterra Farms, that company functions as the management entity for the other two, and after she attempted to run financial reports for Sunterra, they 'reflected all zeros. The Sunterra Farms journal entries were blank where financial information used to exist.' In that same update to the court, she indicated that she had just learned the Sunterra information had been restored, but she still was unable to access information pertaining to the Price family's parent companies in Canada. Walkes asked the court to clarify her authority to gain access to that information. In response, Sunterra and its affiliates argued Walkes had no 'permission to reach across the border into Canada to look at information not belonging to' the companies. On Monday, U.S. District Judge Eric Schulte gave lawyers for Sunterra and its affiliates to until the end of day Wednesday to file 'an unequivocal declaration' that no evidence had been destroyed or manipulated. As for the receiver's access to information on the Canadian parent companies, Schulte gave the companies' lawyers the same deadline to request a protective order that articulated the 'reasons why they believe such information should be protected from disclosure.'
Yahoo
08-04-2025
- Business
- Yahoo
Lawsuit: 110,000 pigs in ‘imminent danger' due to billion-dollar check-kiting scheme
A lender to an Iowa ag company accused of operating a billion-dollar check-kiting scheme says 110,000 piglets are at risk of starvation. (Photo by) An Iowa ag company accused of operating a billion-dollar check-kiting scheme is being sued by a lender that says 110,000 piglets are at risk of starvation. Compeer Financial of Minnesota is suing Sunterra Farms Iowa Inc., Sunwold Farms Inc., and Lariagra Farms South Inc. in U.S. District Court. Compeer alleges that the three defendants operate extensive swine operations in Iowa and South Dakota, and have granted Compeer, their lender, exclusive security over their collective assets. Compeer is asking the court to appoint a receiver to take control of the defendants' assets so that Compeer can protect its collateral by continuing to provide for the feeding and care of 110,000 head of swine. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX The defendant companies are allegedly operated by the Price family of South Dakota, including Ray, Art and Glen Price, who own and manage 110,000 head of swine in 54 barns located in and around Yankton County, South Dakota. The swine — which are in various stages of growth and are owned by either Sunterra or Lariagra — are among 500,000 hogs managed by Sunterra. Compeer claims in the lawsuit that because of what it calls 'the long-running fraud' perpetrated by the defendant companies, they cannot be trusted to operate their businesses and protect their assets, including the 110,000 head of swine in Yankton County. According to the lawsuit, the three defendant companies have engaged in check kiting — a fraudulent practice in which a company draws checks from one bank account for deposit in another bank account that it controls, when neither account has sufficient funds to cover the checks. The process takes advantage of the delays in processing checks between banks, allowing one account or another to continually show credits for funds that have yet to be collected. Compeer's lawsuit claims that earlier this year, the defendant companies were issuing each other numerous checks, in nearly identical amounts, on a daily basis — with some checks ranging from $800,000 to $990,000, an amount just below the threshold that would trigger scrutiny from regulators. The transactions had the effect of creating phony positive account balances that caused Compeer to pay the companies interest, the lawsuit claims. Compeer alleges that on Feb. 12, 2025, the day after it asked Ray Price, the CEO of the defendant companies, about the transactions, it received a batch of checks totaling $9 million drawn one of the defendants' Canadian bank accounts for deposit into the defendants' account with Compeer. Later that day, the lawsuit claims, Ray Price admitted that the checks were intended only to prevent the Compeer account from being overdrawn, and acknowledged that if Compeer attempted to deposit the $9 million it would trigger a corresponding overdraft in the Canadian account. According to the lawsuit, Price admitted that what the companies were doing was 'wrong.' About 24 hours later, the lawsuit claims, Price spoke to Compeer personnel and said the Canadian account was overdrawn by roughly $21 million, adding that he needed Compeer to immediately 'send the money back' to the Canadian bank to cover the overdraft. Compeer refused. In late February, the lawsuit alleges, Compeer learned the Canadian bank had rejected 65 checks totaling $59.9 million previously credited by Compeer to the defendants' accounts. As a result, the defendants' $21 million positive cash balance at Compeer was instantly wiped out and replaced with a $36 million debt owed by the defendants to Compeer. In its lawsuit, Compeer alleges that before the check-kiting scheme collapsed, it involved 'billions of dollars' in fraudulent transactions. Court records show that on March 17, 2025, the Canadian bank asked that a receiver be appointed to look after the defendants' assets. However, the listed assets in that case didn't include the 110,000 head of swine in Yankton County, or the 370,000 head owned by third parties and managed by Sunterra. In court filings, Compeer says that over the past several weeks, it has provided funds necessary for the care and feeding of the Yankton County pigs, but says it is no longer willing to do so 'while the parties who perpetrated this fraudulent scheme' remain in control of Sunterra, Sunwold and Lariagra. 'These swine are in imminent danger of starvation if feed is not promptly purchased and delivered to barns housing the pigs,' the lawsuit states, adding that workers hired to provide for the animals' care may soon walk off the job given the Price family's inability to make payroll. If court appoints a receiver, Compeer states in its court filings, it will advance the money necessary to protect its collateral and prevent the animals' starvation. The Price family has not yet responded to the lawsuit and Sunserra declined comment. The lawsuit seeks unspecified damages for fraud and unjust enrichment. The lawsuit was initially filed in South Dakota state court before being transferred to federal court. SUPPORT: YOU MAKE OUR WORK POSSIBLE
