** This story has been changed from the original posting.
TOLEDO, Ohio — Foreclosure action has been filed in federal court against Vreba-Hoff Dairy Development and six farms associated with them.
The latest court filing came Oct. 5 when Rabo AgriFinance filed a foreclosure action in a federal court in Michigan to recover a $55 million debt.
Dairies associated with Vreba-Hoff Dairy Development are been embattled in bankruptcy filings, foreclosures and lawsuits concerning breach of contract and the environment.
The foreclosure filed by Rabo AgriFinance includes loans totaling over $55 million including one loan for $14.4 million against Waldron Dairy (Michigan), Blue Stream Farms, Wild Cat Farms and Williams Dairy Farm (Ohio farms).
The court documents list another $2 million loan against Waldron Dairy, Blue Stream Farms, Wild Cat Farms and Williams Dairy Farm.
The mortgages were not just for farms but also for the cattle themselves in some cases. The foreclosure includes other personal property as well, including equipment.
There are actually two cases filed in federal court. The first case names six dairy companies as the principal defendants; Waldron Dairy, Vreba-Hoff -1, Vreba-Hoff-2, Blue Stream, Wild Cat and Williams Dairy Farm. The first three are Michigan farms. The other three are Ohio farms.
The second case is trying to recover the debt from certain guarantors of the loan.
All six dairy companies signed each of the several promissory notes included in foreclosure filing from Rabo AgriFinance. All six dairies pledged some type of security for each of the loans.
The three Michigan dairies promised land and personal property. The three dairy companies pledged personal property by signing security agreements. (It appears their land had already been mortgaged.)
The foreclosure came after the state of Michigan put a $580,000 lien on Vreba-Hoff properties in Michigan.
The lien was levied after Vreba-Hoff Dairy failed to pay an agreed-upon settlement in a 2003 environmental case. The state and dairies were given until Oct. 18 to reach a settlement.
A federal judge was scheduled to hear an emergency motion Oct. 19 on a request to appoint a receiver to take over the six dairies with thousands of cows in the foreclosure action.
However, a motion filed Oct. 15 was granted to continue the hearing. It is now rescheduled for Dec. 13.
According to the court document, based on the negotiations between Rabo AgriFinance, Vreba-Hoff and Waldron Dairy, Rabo believes the parties may be able to resolve the receivership issue without the need for further litigation.
The state of Michigan has filed four lawsuits in seven years against Vreba-Hoff for failure to manage the waste produced by the large dairy farms.
Michigan is not alone in filing environmental lawsuits against dairies.
In June, the state of Indiana barred DeGroot Mega Dairies from operating under the direction of Johanne De Groot because of water pollution.
According to Attorney Todd J. Janzen, attorney for De Groot, DeGroot was supposed to sell the operation to Vreba-Hoff in 2008. Vreba-Hoff assumed management of the farm at that time but never procured the funds necessary to close the deal. Then in July, management of the farm was turned over to Sunshine Dairy, LLC. Sunshine Dairy, LLC is not affiliated with Vreba-Hoff.
Vreba-Hoff Dairy Development LLC, assists European, Canadian, and other dairy producers in establishing new dairy operations in the United States.
So far, Vreba-Hoff Dairy Development LLC is included in lawsuits totaling more than $108 million across three states; Ohio, Michigan and Indiana.
As of this month, 23 dairies associated with Vreba-Hoff or with a Vreba-Hoff financial interest have filed for bankruptcy or been foreclosed on.
Out of 11 dairies, contacted by the Farm and Dairy, only one actually answered the phone and declined any comment until the legal battle is over. Eight of them had disconnected numbers.
Phone calls were also placed to Rabo AgriFinance but they could only say they’re not allowed to comment on ongoing litigation.
Attorneys listed for Vreba-Hoff Dairy Development were also contacted, but calls were not returned.