KeyBank is accused of violating Oregon law by disclosing the financial information of Meduri Farms in its lawsuit against the fruit grower and processor.

Meduri Farms claims KeyBank has violated Oregon law by revealing private financial information in legal proceedings against the fruit grower and processor.

The lender filed a federal complaint seeking a court-appointed receiver to liquidate Meduri Farms of Dallas, Ore., which is responding with counterclaims that KeyBank unlawfully breached client confidentiality.

To support its claims that Meduri Farms faces “imminent danger of insolvency,” KeyBank included draft financial statements and other sensitive data about the processor’s business.

According to Meduri Farms, the lender has refused to remove this information from the court docket despite acknowledging it’s sensitive and should be filed under seal to avoid public disclosure.

The fruit processor alleges KeyBank has breached its “duty to protect the confidential financial information of its customers” and violated an Oregon statute that prohibits disclosure of financial records.

It was “reasonably foreseeable” these court filings would cause “financial and reputational harm” to Meduri Farms, which claims it’s owed compensation for damages in an amount to be determined at trial, according to its court filing. The company is also seeking to recover its attorney fees from KeyBank.

A representative of KeyBank said the company doesn’t comment on pending litigation.

The draft combined financial statements report in question describe the assets, liabilities, earnings and expenditures of Meduri Farms in 2021 and 2022.

The company grows blueberries and tart cherries on about 470 acres and dries these and other fruits for sale to major retailers and food manufacturers, including Costco and Kind Bar.

In 2022, the processor achieved revenues of $76 million, up from $69.5 million in 2021, but lost $11.8 million, compared to $800,000 the previous year, due to higher raw material costs, increased interest expenses and other factors, according to the report.

The company had about $51.5 million in assets in 2022, down from $55 million in 2021, and owed $48.4 million in debt and other liabilities, up from $40 million the previous year, the report said.

Mostly due to the company’s losses, the owners’ equity in Meduri Farms fell to about $3 million at the end of 2022, down from about $15 million the previous year, the report said. The company’s cash decreased from about $1.5 million to less than $700,000 between 2021 and 2022.

Apart from the financial statements, KeyBank’s court filings included the accounts receivable list of payments due to the Meduri Farms as well as the accounts payable list of money it owes to suppliers.

Meduri Farms owes more than $7.5 million in accounts payable to growers, packers and brokers of blueberries and other fruits, primarily in Oregon, Washington and British Columbia.

The company owes $1.5 million to the Scenic Fruit Co. of Gresham, Ore., the largest amount among these suppliers, followed by $1.1 million to Fraser Valley Packers of Abbotsford, B.C., and $667,000 to Royal Ridge Fruits of Royal City, Wash.