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Many of the assets of the several firms that made up Mills Family Farms, a longtime Salinas Valley agricultural operation, are scheduled to be auctioned off Aug. 12 at the Monterey County Administration Building.

Mills Family Farms suspended operations in July 2008, citing financial difficulties in relationship to several real estate developments in which the firm and its principal owners -- Basil Mills and Roger Mills -- were involved.

Records show that Mills Distributing Co. opened its doors for business in 1958. For decades it was one of the leading and more respected shippers in the Salinas Valley.

Over the years, the Mills family business diverted some of its acreage and assets into real estate developments, most notably a housing project in King City and an exclusive real estate development in the hills above the Salinas Valley under the name Monterra. The declining real estate market in the area was blamed for the financial problems, and apparently the Mills family farming business and the real estate operations were financially linked.

The Salinas Californian and other local papers reported that in November and December 2008, four Mills properties in Salinas and King City were foreclosed. In the past year, the foreclosure process has also been launched on both the King City and the Monterra projects, and construction has been halted. It has also been widely reported that the Salinas' Employee Deferred Compensation Fund was a major investor in the Monterra project and has lost millions of dollars as a result.

In recent months, several agricultural creditors have received judgments against Mills Family Farms and its affiliated companies, including Boss Farms, Mivco Packing Co. and Whole Leaf LLC, all Salinas, CA-based companies. The Salinas Californian reported that county records show that one of those creditors is Western Farm Services, which provides a myriad of products and services including pesticide and fertilizer applications. Western Farm Services was granted a $5.4 million judgment against Mills and its affiliated companies in April.

United Security Bank is the creditor that has forced the asset sale. It is apparently owed $3 million on secured notes with Boss Farms, Mills Family Enterprises and Whole Leaf LLC, which allows it to hold the auction. Assets for sale include a long list of farming equipment, such as tractors, trucks, tanks, backhoes and filtration systems.