A tentative settlement has been reached to allocate money from the fraud-driven bankruptcy sale of Cody Easterday’s farms in Eastern Washington.

The agreement between the Easterday family and creditor committees was filed late April 14 in U.S. Bankruptcy Court. During a brief conference Friday, Judge Whitman Holt in Yakima set a hearing on the settlement for Tuesday.

“I think it’s terrific news that there appears to be peace in the valley,” Holt said.

Easterday filed for bankruptcy more than a year ago shortly before pleading guilty to defrauding Tyson Fresh Meats out of $233 million. He supplied cattle to Tyson, but billed the company for more cattle than he delivered.

Easterday is set to be sentenced June 13 in U.S. District Court for wire fraud. He faces up to 20 years in prison, according to federal prosecutors.

The bankruptcy settlement provides a framework for distributing proceeds from the liquidation of Easterday Farms and Easterday Ranches. Both companies were owned and directed by Cody Easterday and his wife and mother.

The agreement “paves the way for a 100% recovery to general unsecured creditors of Farms and a material recovery to general unsecured creditors of Ranches,” according to the filing.

The Easterdays’ holdings included 22,500 acres of farmland in the Columbia Basin. Farmland Reserve Inc. bought the land, stretching over several farms in Benton County, for $209 million in July.

Under the settlement, Easterday family members won’t net any money from the sale, but will keep other property, including an onion storage shed in Pasco and land in Idaho appraised at $9.2 million.

The agreement would shield Cody Easterday’s wife and mother from being held responsible for allegedly failing to detect or stop the fraud.

Tyson supports the settlement and is not prohibited from continuing to seek restitution from Easterday, according to the agreement. Tyson declined to comment further Friday.

The Department of Justice must agree to the settlement. Assistant U.S. Trustee Gary Dyer told Holt that he had not seen the agreement until it was filed.

In the filing, lawyers called the settlement a “pivotal moment” and a “triumph” of hard negotiations. Easterday family members and opposing lawyers have been in an expensive battle over the bankruptcy proceeds.

Lawyers and financial advisers representing creditor committees have racked up about $10 million in fees between late July and January, according to an Easterday family attorney. The money was paid from the bankruptcy sale proceeds.

An Easterday family statement, also filed Thursday with the court, says that Cody Easterday “self-reported to Tyson management” on Nov. 30, 2020, and resolved to take responsibility for his actions and work to repay Tyson.

By the end of December, it was clear Easterday Ranches, which had 76 employees, would fold. By January, it was clear that Easterday Farms, which had 124 employees, was also in jeopardy, according to the statement.

Easterday advised the creditor committees to plant wheat rather than onions and potatoes. Wheat would take less labor, water and equipment and in May and June would be “aesthetically pleasing” to potential farm buyers, according to the statement.