J.R. Simplot, the largest supplier of fresh potatoes in the US tried to convince the Ninth Circuit on Monday that a business partner improperly took over a vegetable processor without paying.
Washington Potato Company won a judgment in federal court in 2017 allowing it to purchase Pasco Processing for $0, after U.S. District Judge Rosanna Peterson ruled its contract with Simplot allowed the transfer because there was a deadlock over capital contributions to Pasco.
Simplot has a contentious history with both companies.
The agribusiness giant sought control over Washington Potato and Pasco, in addition to other smaller processing and distribution companies integral to its business, in 2016, claiming the companies were being mismanaged and in danger of going bankrupt.
That federal complaint was dismissed in 2017 due to lack of jurisdiction.
In the current dispute, Simplot claims there was not an official deadlock because the term only refers to matters that require board approval. Washington Potato asked Simplot to contribute $3 million for Pasco’s defaulted loan, but the contribution only required Simplot’s members to approve, attorney Eric Miller told a three-judge appellate panel Monday.
“There is a distinction between members and board members,” Miller said. “Can members take any action apart from through the board?” U.S. Circuit Judge Morgan Christensen asked.
