AgStar Wins Veblen West Dairy at Bankruptcy Auction

After extensive legal machinations, Richard Millner appears to be losing his battle to hang onto his dairy fiefdom. Yesterday U.S. Bankruptcy Court Judge Charles Nail granted Trustee Forrest C. Allred's motion to sell the Veblen West Dairy in northeast South Dakota. According to court documents, Financier AgStar, which took the dairy into receivership in March, bought the giant confined animal feeding operation for $8.7 million. AgStar also bought the CAFO's cattle, numbered in the trustee's motion to sell at around 3700, for $2.96 million, $800 a head.

Millner and his business partners had successfully delayed the bankruptcy sale for a couple weeks with a transparently bogus lease plan. In a filed objection, AgStar lambasted the debtors' proposed reorganization plan, saying the document "miserably fails to provide adequate information," "ignored... reality," and falsely claimed compliance with DENR orders after "serial violations by the Debtor of its environmental obligations." Trustee Allred also submitted responses saying the Veblen West owners had been unable to meet a whole slew of payments over the past months and would not be able to carry out their plan. After feebly claiming they would amend their disclosure statement to address these objections, the equity owners yesterday withdrew their plan and watched Veblen West slip from their hands.

Making a bad month for Millner worse, he stands to lose another 4476 heifers in Montana. The following public notice appears in the Sidney (MT) Herald:

NOTICE
SHERIFF’S NOTICE TO OWNER OF SALE OF OWNER’S PROPERTY AT
PUBLIC AUCTION

To: Vantage Cattle Company LLP, 104 S. Greenman Street, Veblen, SD 57270
YOU ARE HEREBY GIVEN NOTICE IN ACCORDANCE WITH 71-3-1203 (4) THAT:

1. On Wednesday, November 24, 2010 at 10:00 AM, or as soon thereafter as the cattle are assembled, sorted and prepared for sale, at the Yellowstone Livestock Sale Barn located in Sidney, Montana, replacement dairy heifers owned by Vantage Cattle Company LLP will be sold at public auction to enforce an Agisters Lien held by Steven Lunderby and Shanna Lunderby d/b/a Lunderby Livestock.
2. The amount of the claim against the livestock to be sold at the public auction is Five Hundred Ninety Five Thousand Eight Hundred Seventy Five and 31/100 Dollars ($595,875.31).
3. The property to be sold is approximately 4,476 dairy replacement heifers, or so many thereof as will satisfy said lien.
4. The name of the owner, and who contracted for the services to be performed, is Vantage Cattle Company LLP.
5. The name of the lien claimant is Steven Lunderby and Shanna Lunderby individually and d/b/a Lunderby Livestock.
   

DATED this 10th day of November, 2010.
Brad Baisch
Richland County Sheriff

Vantage Cattle Company: Notice that Veblen, SD address? Vantage is another of Millner's shell companies. According to documents from the South Dakota Secretary of State's office, Millner is the official agent of the company. The partners listed in 2009 were Aaron Anderson, Duayne Baldwin, Jay Hill, Jorden Hill, Dennis Pherson, Lenny Pherson*, Wayne Viessman, and Michael Wyum... mostly the same guys who make up the (former!) Veblen West Dairy major equity holders and the Vista Family Dairy company Millner formed to try leasing Veblen West back to himself.

Distantly related: Sidney stockyard owner Steve Sunderby was also tangled up in a $7.8 million cattle fraud scheme that sent Todd Kenneth Horob to prison for eleven years.

Now I don't know much about cattle, but I have to wonder why Millner and his pals were trucking cattle all the way out to Sidney, on the Montana–North Dakota border. Veblen to Sidney is an eight-hour drive, says Google Maps. It would seem that even if I was getting a really good deal on feedlot or pasture rent, I'd still save money and stress by keeping my heifers a little closer to my main operations. But I welcome the comments and corrections of my cattleman-readers on that point.

So Millner is out one big dairy and about 8000 cattle. He still faces $453,000 in liens for back taxes owed to us South Dakota taxpayers, as well as DENR's apparent willingness to deny Millner an environmental permit to run any South Dakota feedlot. 2010 is not ending well for Richard Millner.
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*Update 09:51 CST: Lenny Pherson died last summer at his home in Rutland, ND. He was still listed as a partner in Vantage on the last annual report filed March, 2010.