Hog Firm Faces Lawsuit: Financial Firm Seeks $19 Million In Damages, Receivership

Taking advantage of the delay in the check collection process, checks are exchanged daily between these accounts, which continually show credits of “uncollected funds.” The kite will collapse when one of the banks refuses to honor a check drawn upon “uncollected funds,” the plaintiff alleges.

In addition, the firm has sought a receivership for the three operations allegedly to prevent the death of more than 110,000 hogs in South Dakota.

Compeer Financial PCA, the plaintiff, operates under United States laws, with its Mankato, Minnesota, office considered germane to the proceedings. Compeer is part of the Production Credit Association (PCA).

Compeer filed suit in First Circuit Court at Yankton County against three defendants: Sunwold Farms Inc. and Lariagra Farms South, both of Beresford, and Sunterra Farms, an Iowa-based entity with an office in Beresford.

Sunterra Group is a Canadian umbrella entity that various members of the Price family own and utilize to facilitate a “farm to for” integrated agricultural operation, according to court documents.

The plaintiff considers Yankton County as the proper venue for three reasons:

• The cause of action, or some part, arose in Yankton County;

• All three defendants regularly transact business in Yankton County;

• A substantial amount of personal property owned in Sunwold and Lariagra, and which are the subject of this receivership action, is located in Yankton County.

In a hearing this week, Circuit Judge David Knoff denied the plaintiff’s motion to avoid mandatory mediation. The judge also denied another motion to appoint a receiver for continuation of the operations and protection of the livestock and assets.

In response, the three defendants have filed a motion in federal court to move the case to U.S. District for South Dakota, South Division.

The defendants’ motion cites their reasons why the jurisdictional move is appropriate for this case.

In the defendants’ arguments:

• The action is a civil suit in which plaintiff seeks damages against the defendant in an amount exceeding $75,000. More specifically, the plaintiff is seeking damages of $18,943,468.35;

• Two defendants are South Dakota citizens, the third defendant is a citizen of Iowa, and the plaintiff is a Farm Credit cooperative with its principal place of business in Wisconsin;

• The action involves a dispute and controversy properly within the original subject matter and jurisdiction of the U.S. District Court.

The defendants will also file the notice for removal with the Yankton County clerk of courts and the plaintiff.

THE background

Court records contain the plaintiff’s allegations and the relief sought in the lawsuit.

In a complaint filed last week, Compeer Financial alleged fraud and breach of loan agreements on the part of those entities, with mailing addresses at 907 West Cedar Street, in Beresford.

According to court documents, Compeer petitioned for the immediate appointment of a receiver to prevent the starvation and death of more than 110,000 pigs located in South Dakota.

Compeer also sought redress for financial damages resulting from an alleged check-kiting scheme involving billions of dollars fraudulently transferred by the defendants and their principals between Canada and the United States.

The defendants named in the complaint include multiple generations of the Price family of the Village of Acme, located in Alberta, Canada, the records say.

“Ray Price, Art Price, and Glen Price are siblings who, upon information and belief, are directors, members, and/or shareholders of Defendants or Defendants’ parent companies and make decisions for and run the Defendants’ businesses and various other businesses related to and associated with Defendants, including but not limited to the Sunterra Group,” court documents said.

THE ALLEGATIONS

According to the complaint, the defendants each established revolving lines of credit with Compeer, allowing them to borrow up to a combined $11.5 million across all three entities. The revolving lines of credit were coupled with interest-bearing financial products called Farm Cash Management (FCM) accounts.

Issues of indebtedness arose in the fall of 2024, and an agreement was reached with Compeer to establish lines of credit with each of the three entities listed in the complaint.

The complaint also said that Sunterra, Sunwold and Lariagra granted Compeer a security interest in various items of personal property, including but not limited to all crops, livestock and poultry, feed, seed, accounts and general intangibles, equipment, contract rights, chattel paper, documents, accounts receivable arising from the sale of all collateral, association stock and proceeds from the disposition of those items.

“On or about February 10, 2025, Compeer’s accounts showed that the Defendants had a combined positive balance of approximately $21 million in funds payable to the Defendants,” court documents said.

“That overall positive balance was comprised of a positive FCM balance of approximately $14 million for Sunterra; a positive FCM balance of approximately $10 million for Sunwold; and a draw on the Lariagra operating line of approximately $3 million.”

Also at that time, Compeer became aware of the defendants’ alleged suspicious check writing activities between Compeer and the National Bank of Canada, previously the Canadian Western Bank (CWB).

The activity artificially decreased any indebtedness that the defendants had to Compeer, and falsely increased any positive FCM balance that Compeer would have owed back to those entities, the complaint said.

“This is because Compeer would generally credit the entities’ accounts on the day that the check was deposited, even though it could take several days for the check to clear,” the document said.

“In accordance with that written notice, on February 11, 2025, Compeer immediately took action to ensure that checks by the Defendants would have to be manually approved, so that Compeer could monitor their check-writing activity.”

A CALL

Court documents said that on Feb. 12, after $9 million in checks to CWB were denied by Compeer, Ray Price admitted to Compeer in a video call that:

• the defendants were moving funds back and forth between Compeer and CWB to avoid being overdrawn on their Compeer accounts;

• the practice of sending checks back and forth between the same accounts was “wrong;”

• if Compeer deposited the $9 million in checks received earlier that day but did not permit new checks to be drawn on the Compeer accounts, that would cause an overdraft at CWB;

• if Compeer did not allow the defendants to move money from Compeer to CWB, the defendants would not have enough money to cover their operational expenses;

• Price felt “badly” that Compeer has been paying interest to the defendants for the positive FCM balances.

Also, during the video call, Price allegedly said Compeer was holding more than $20 million in positive FCM balances that he wanted sent back to the accounts at CWB, at least in part, to cover their overdraft position at CWB, court documents said.

However, the document concludes that the defendants are insolvent because the combined lines of credit that have $35,259,796.62 drawn on them while their collateral is currently valued at approximately $19,017,724.

Also, that there is no money to pay the contractors that feed and care for the hogs, “which are in imminent danger of starvation if feed is not promptly purchased and delivered to barns housing the pigs,” the lawsuit said.

It is also possible that the contractors will walk off the job if they are not paid, the document said.

LOCAL REACTION

A local official with knowledge of the situation agreed to speak with the Press & Dakotan on the condition of anonymity.

The official said this closure will affect at least six farmers in Yankton County, and possibly more.

“It’s kind of an eye-opening experience,” the source said. “It’s not like the days of long ago when the operations were smaller. Now you’re dealing with multi-million-dollar corporations.”

The local producer doesn’t hold leverage and stands to lose everything, the source said.

“What happens to the farmer and his hired hands?” the official asked. “The company just closes and there’s no negotiating power for the farmers who were contracted with them? It’s a pretty serious issue, and we don’t even know what’s going to happen to those hogs.”

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