Lost Valley Farm

The former Lost Valley Farm outside Boardman, Ore., which Cole Easterday proposes to reopen.

BOARDMAN, Ore. — A federal bankruptcy judge in California will allow the proposed sale of Lost Valley Farm to proceed as scheduled, despite objections from Oregon state agencies over who will clean up millions of gallons of wastewater and manure at the failed dairy.

Lost Valley Farm was permitted for up to 30,000 cows in early 2017, which would have made it the state’s second-largest dairy near Boardman, Ore. Instead, owner Greg te Velde almost immediately ran afoul of regulators for improper handling and storage of animal waste.

Te Velde filed for bankruptcy in April 2018, forestalling an auction of his cows to repay $67 million worth of loans to Rabobank, a Dutch agricultural lender. Five months later, the court appointed a trustee from San Francisco to manage the dairy after finding te Velde continued a longstanding pattern of illegal drug use and gambling.

The trustee, Randy Sugarman, is looking to sell the dairy and recently entered into an asset purchase agreement with Canyon Farm LLC for $66.9 million. As a “stalking horse” bidder, a buyer selected to establish a minimum value for the property, Canyon Farm may be outbid at auction, which is now scheduled for Feb. 6. The sale is expected to close on March 1.

Canyon Farm is a limited liability company registered in Delaware, though the farm operator was identified in court documents as Easterday Farms, a family-owned business based in Pasco, Wash. Cody Easterman, one of the farm’s co-owners, did not immediately respond to an email seeking comment.

The Oregon Department of Agriculture and Department of Environmental Quality, which jointly oversee the state’s Confined Animal Feeding Operation — or CAFO — program, objected to the sale on Jan. 7. While the agencies do not oppose the sale of Lost Valley Farm per se, they did question who will ultimately clean up the property to avoid potentially harming the environment.

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