Foremost Creditors Withdraw Opposition

Dairy farmers and other creditors in the long-standing Foremost Dairies Northwest bankruptcy have withdrawn their opposition to U.S. Bank of Washington receiving the estate’s $11.6 million in assets.

Creditors’ attorneys concluded that the statute of limitations had run out on claims of fraud and lender liability against the bank, a secured creditor that financed the purchase of Foremost in 1989.

Foremost, which operated a Spokane milk bottling plant, now called Broadview Dairy, was seized a year later and forced into Chapter 7 bankruptcy in 1991.

Farmers, who lost nearly $3 million when the dairy company was seized, claimed that U.S. Bank was an investor, not a lender. The distinction was important since judges do not award assets of a bankrupt estate to investors.

“We have folded our tent,” said James Moilenan, a Bellevue real estate consultant and Foremost creditor.

A hearing date has not been set for U.S. Bankruptcy Judge Karen Overstreet in Seattle to rule on the priority of liens and award the millions to U.S. Bank.

, DataTimes