YAKIMA, Washington — The court battle over the fraud-forced sale of ex-cattleman Cody Easterday’s bankrupt farming and ranching empire in Eastern Washington intensified Wednesday, March 16.

Lawyers for Easterday’s wife and mother told U.S. Bankruptcy Judge Whitman Holt in Yakima that the attorneys and two creditor committees overseeing the liquidation of Easterday Farms and Easterday Ranches should be ousted.

Debby Easterday, Cody’s wife, and Karen Easterday, whose late husband, Gale, started the Columbia Basin companies, claim the attorneys and committees are allowing the Ranches business to rob the Farms business. They are separate family businesses with different creditors.

Another difference is the Farms business expects to emerge from bankruptcy with between $20.4 million and $45 million left for the ex-owners, according to court records.

The Ranches business, weighed down by Cody Easterday’s $233 million debt to fraud victim Tyson Fresh Meats, will be broke.

The Easterdays allege that money is improperly flowing from the solvent Farms to the insolvent Ranches, including about $1.1 million for fuel, labor and hauling cattle and feed last summer.

“If that happened, it’s problematic,” Holt said.

Much bigger sums are at stake as the committees and Easterdays negotiate a settlement. Although the Farms and Ranches businesses filed for bankruptcy separately last year, the debts are intertwined.

Cody Easterday, due to be sentenced June 13 for wire fraud, pledged in a plea agreement last year to pay back Tyson. A judge has twice delayed sentencing to give him time to sell family property to raise money for restitution.

Tyson attorney Alan Smith told Holt that anything the Easterdays have after bankruptcy proceedings will be “fair game.”

“They manage to go ahead and pooh-pooh, frankly, the biggest breach of fiduciary duties here, which is the fact that Karen and Debby and Gale were all directors and were supposed to be supervising Cody as he committed his fraud,” Smith said.

“Frankly, if there is equity in Farms, if there is equity in anything else, if there is equity in Karen’s ranch that she has and lives on, all of these things are fair game,” he said.

Before Wednesday’s court hearing, the Easterdays demanded the Farms and Ranches committees resign and be replaced by new directors.

The committees are resisting the move. Holt did not rule Wednesday and set more hearings on whether there’s a conflict of interest between the Farms and Ranches committees.

The Easterdays base some of their claim for consideration on their work in the past year to maximize the value of their assets for creditors.

According to court records, a combine broke down during wheat harvest. Rather than waiting six weeks for a replacement part, Debby Easterday drove all night to pick one up in Nebraska and immediately drove back.

Lawyers submitted a seven-page memo on Cody Easterday’s efforts last year, including his role in selling the family’s farms to Farmland Reserve Inc. for $209 million.

“Nobody has worked harder than the Easterdays to run assets into cash,” said Jeffrey Misley, Cody and Debby Easterday’s lawyer.

The Easterdays also are tying to remove from the case Los Angeles attorney Richard Pachulski and other lawyers who work with both creditor committees. The Easterdays claim that Pachulski and his firm can’t represent both committees because the committees have conflicting interests.

In a court filing, Pachulski’s firm said allowing the Easterdays to remove the committee would be “catastrophic” for everyone else.

The Easterdays are risking “destroying the recoveries for (creditors) because they are not getting as much as they want,” the filing claims.

Tyson contracted with Cody Easterday to supply cattle for its beef plant in Eastern Washington. Easterday billed Tyson for cattle that didn’t exist.