Compeer Financial has asked the court to dismiss Sunterra’s counterclaims in their entirety in the check-kiting scheme lawsuit filed against three hog farms in Yankton County, South Dakota. In court documents filed Wednesday, the member-owned Farm Credit cooperative says the counterclaims “contravene the court’s order granting Compeer Financial’s application to appoint a receiver” and “violate the court’s receivership order by interfering with the receiver and receivership property.”
Compeer also contends Sunterra’s “negligent misrepresentation counterclaim falls woefully short of the heightened ‘particularity’ pleading standard for asserting a misrepresentation claim” and the “defendants’ vague allegations attempting to blame their lenders for defendants’ own misconduct are wholly implausible.”
In their counterclaim filed April 11, defendants Sunwold Farms, Sunterra Farms, Iowa and Lariagra Farms South contended that Compeer “does not adequately communicate with its borrowers, hides information, and pretends to work with its borrowers until it unilaterally decides not to.” The defendants also claimed Compeer knew about the cash flow issues and assisted the farms move money between accounts and increased credit line advances to help facilitate those transfers.
In Compeer’s motion to dismiss, the financial institution noted that, instead of testifying at an evidentiary hearing, the defendants chose to use an unsworn counterclaim to “make flagrant allegations against Compeer despite previously conceding that they had no evidence to support their position, now going so far as to risibly claim that Compeer is a rogue institution ‘not regulated’ by any governmental entity.” Compeer also pointed out that Canadian Western Bank has filed its own action against the Canadian Sunterra entities confirming that “CWB was also victimized by the same check-kiting scheme.”
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