Jeff Todd interviewed on new law designed to protect agriculture producers
The recent bankruptcy of a large Indiana-based livestock brokerage company accused of bouncing more than $130 million in checks owed to 750 cattle producers nationwide, including many in Oklahoma, sparked recent legislation designed to ensure that doesn’t happen again. The Livestock Owner’s Lien Act of 2011, which was signed into law by Governor Fallin on April 26, 2011, creates an owner’s lien which ensures livestock producers maintain a security interest in the livestock they sell until the proceeds from the sale clear the bank.
Attorney Jeff Todd, co-chair of McAfee & Taft’s Ag and Equine Industry Group and legal counsel for the Oklahoma Cattlemen’s Association, was interviewed by The Journal Record‘s Brian Brus about the effects of Eastern Livestock’s business actions and subsequent bankruptcy on agriculture producers and the need for the new law in a front-page article titled “Cattlemen: New law offers security.”
Todd understands the situation well. Not only does he represent cattle owners who did not receive payment for livestock purchased by Eastern Livestock, but he also helped draft Senate Bill 530 for the state lawmakers who authored the legislation.
Todd explained that Eastern Livestock typically bought livestock from one source and then quickly re-sold those same cattle to another buyer, sometimes within the same day. “By the time the checks bounced, those cattle had already been moved upstream one or even two levels higher,” he said, “so there was no ability to secure a claim in the bankruptcy, and everyone knows that being an unsecured creditor is not the best position to be in.”
While the Livestock Owner’s Lien Act of 2011, which goes into effect November 1, 2011, can’t help producers with unsecured claims now, he said it will go a long way in protecting them in the future. In passing the new law, Oklahoma lawmakers were among the first to respond to the Eastern Livestock’s failed business actions and financial meltdown. While lawmakers in Kentucky are working on similar legislation, Todd said Oklahoma’s law provides greater protection.