Family cranberry dispute results in $2.5 million jury verdict

Published 8:30 am Friday, December 3, 2021

A dispute among cousins over an Oregon cranberry farm has resulted in a $2.5 million jury verdict against the brothers who manage the operation.

The legal dispute centers on the management of Bussmann Cranberries LLC, a family farm and processing operation in Curry County operated by brothers James and George Bussmann.

The brothers were sued by four of their cousins who own shares in the company but don’t manage it: sisters Sara Strain, Elizabeth Potter, Jennifer Isenhart and Mary Kistner.

A representative of the defendants said there are still pending legal issues in the case and a final judgment hasn’t yet been issued, so “it would be premature to a give a statement at this time.”

According to the complaint, James and George Bussmann own roughly 85 acres of cranberry bogs that are separate from the joint 34-acre family operation.

The complaint alleged that for a decade, those other farms sold fruit to the joint family company at inflated prices, which served “no apparent business purpose” other than to enrich the brothers.

The joint family “limited liability company,” or LLC, has been mismanaged to help businesses owned by the defendant brothers, the plaintiffs said.

“Although the LLC has operated at a profit in the past, and is capable of operating at a profit, neither plaintiffs nor the other members have received any distributions over 15 years,” they said. “Plaintiffs have realized no economic benefit from their membership in the LLC.”

The brothers forced the family business to pay them “lump sum amounts,” even though the joint company didn’t receive “anything in exchange,” the complaint said.

These “sham transactions” were concealed with “false and misleading purchase orders and accounting records” by the brothers, who controlled the family company’s books, the complaint said.

The lawsuit alleged the brothers commingled their own assets with those of the family company. The family assets have been “disproportionately used” to help the defendants’ separate businesses, the complaint said.

The complaint claimed the brothers have failed to disclose real estate opportunities to the joint family company but nonetheless used its resources to purchase that property for their own businesses.

During the course of the legal dispute, the brothers took control of a property with water rights and then denied water to the joint family farm, the complaint said.

The complaint alleged the brothers sought to deprive the joint family company of its biggest customer by trying to convince it to buy cranberries from other sources.

The plaintiffs claim the brothers have acted with “malice” and last year sought to dissolve the joint family company to “force a sale” of its assets, intending for their own businesses to buy them at “liquidation prices.”

After a seven-day trial held in Coos County Circuit Court last month, a jury decided that James and George Bussmann had breached contractual obligations and committed fraud against their cousins, unjustly enriching themselves.

The jury determined that the plaintiffs are owed more than $700,000 in loans that weren’t repaid, $680,000 in overpayments for cranberries, $470,000 in excessive expenses, and $680,000 related to a real estate transaction.

An attorney for the plaintiffs said the defendants will also owe roughly $1.3 million in interest that’s accumulated since the damages occurred, known as pre-judgment interest.

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