The implosion of Express Grain is a several hundred – million dollar wave crashing into the Delta economy. Bankruptcy court documents filed by the company reveal its true condition. The bankruptcy threatens hundreds of Delta farmers, banks, and even the Greenwood public utility with severe financial losses.
Express Grain Terminals opened in 2007 and is a major grain elevator for farmers in the Mississippi Delta. Dr. Michael Coleman and his son John Coleman own Express Grain Terminals although John's share is 1%. Express Processing open in 2015 and Express Biodiesel opened in 2018. Express Grain owns the other two companies.
It appears growing pains killed the company. The company's revenue nearly tripled in only three years. Financial statements submitted to the bankruptcy court state the company enjoyed gross revenue of $249 million in 2021, $130 million in 2020, and $95 million in 2019. More business means more equipment is needed. More business means more payouts to farmers. The company borrowed heavily from UMB Bank to fund the growth but it continued to sink and to its present underwater state.
The company reports total liabilities of $106 million in assets of $101 million. However, the company owes another $9 million to farmers. The secured claims are $70 million while unsecured claims are $36 million. Total amount owed to farmers is $41 million. The top twenty unsecured creditors report claims of over $23 million. Their statement is posted below.
The damage does not stop with farmers losing their crops. More than a few banks place liens on harvests when farmers borrowed against them. No crop equals no money. No money equals bank gets stiffed.
UMB Bank forced the company into bankruptcy when it sued Express Grain for fraud in September. UMB issued a $40 million revolving loan and a $35 million term loan to the defendants. The bank extended the loans several times this year. The bank allegedly caught the company submitting false financial statements. UMB declared Express Grain in default on loans of $71 million and filed suit in Leflore County Chancery Court. The grain elevator operator filed a Chapter 11 petition in federal court the next day.Earlier post.
A group of farmers filed a class-action lawsuit against UMB Bank two weeks ago. They accused the bank of keeping the broke borrower afloat just long enough to steal the harvests delivered to the grain elevator without paying for them Earlier post.
Ironically, the $33,000 check issued to Express Grain's bankruptcy attorney, Craig Geno, bounced.
There are 1,177 entries in the case.
List of documents posted below
Page 1: bankruptcy petition
Page 10: list of past 90 day transactions
Page 59: summary of assets and liabilities
Page 95: list of creditors
Page 135: grain report
23 comments:
Paving the way for Bill Gates to swoop in and buy it. And he will. See, the devil also works in mysterious ways folks. Ain't it kooooooo ?
There is more than a grain of truth here.
Is this Bennie's area?
yes its bennie's area
Do you think Bennie would bail those honkys out??
That bank should be held accountable for not pulling the chain before harvest and knowing they were insolvent while still taking in peoples crops. I’m sure they had an off record gentleman’s agreement on it. All of them should be held accountable even if it means working the debt off working poly pipe until they die.
Lots of deer camps for sale about now…utvs and girlfriends Mercedes…..fancy houses on bayous…..
Probably more than one murder about to occur
Wow, $31 million in pre-petition unsecured farmers' claims. They are screwed...
Time to hope you havent lent money to the local high dolla nail salons and titty bars!
These grains companies act as banks for farmers. Is there no regulation by the USDA? Can anyone with real world experience chime in?
"...growing pains killed the company."
That's what it always is. It killed Amazon, Apple, Walmart, and on down the line. Sheesh.
Too much growth never killed any company. Mismanagement of growth or malfeasance by management kills companies large and small every day. And before anyone foolishly goes there, this is not a publicly-traded company whose stock price mattered one way or the other separate from the operation of the company. This was a private company whose principals acted in a way to cause the issue. As an example, I am not a fan of Tesla's stock, but credit where it is due - Musk didn't attempt to cash in unto it was plainly foolish to not do so and economic pressure forced the issue.
Here's a tip for novice investors, public, i.e., stock market or private: If ANYONE, principals or investors, are attempting to cash in on the first signs of money to be made, it will be a mess. Cashing in does not mean taking a reasonable return at appropriate points, it means cashing in on OPM rather than the business. It doesn't take much examination to see what went on here. This was by no objective definition an attempt to build a business, this was nothing more than an attempt to cash in on OPM. If you don't understand the very marked difference, you should never invest in businesses, private or public.
Twenty seven golf carts? I kid you not.
The grain company owned 27 golf carts.
11:11
Wal*Mart market Cap $399.85 Billion
Amazon market cap $1799.87 Billion
Apple market cap $2.62 Trillion
Don't see the connection since this debacle was a much lower market cap. Yes these 3 grew from nothing to behemoths. The grain elevator was at best a large business but not large enough to handle growth. With growth come expenses as Kingfish pointed out. I have seen retail business have success with one or two stores or restaurants but as soon as they try to expand the hard cold facts come crashing down and its name is DOOM. It happens everyday in this country. Sometime its about ego, money, pride, total lack of experience or a friendly banker. Most but not all start out with the best intentions but once in so deep the digging starts and finally the hole is so deep they can't get out honorably. IMHO
I
BioDiesel is a TWO BILLION dollar a year cash cow for unneeded biofuels. The money's too good to avoid the hysterical, eye gouging, bend or break every rule fight for it. And this and another thread are living proof of the alleged crimes folks in this area are willing to commit to gather all of Uncle Sugar's sweet sweet farm welfare for themselves. Follow the bio and ethanol trail.
More of this Green/Yellow Gold to come. MUCH more if that bill is passed.
The local farm economy should not be used for speculation into biofuels, i.e., gambling with other people's money. Thus the failure of the latter should not result in the failure of the former. Just my $0.02.
According to court records, Express Grain lied to the bank about the amount of grain owned by Express Grain and in its silos. The bank was fully secured and had no reason to call the loans until the lies were discovered. The value of grain actually owned by Express Grain was far less than the debts owed to the bank.
It looks like Lusco’s picked a good time to close. Most of the patrons are being forced to go to McDonalds.
Attn 14:14 I used to be an auditor for a large bank. We checked our collateral at least every 8 weeks. If the collateral was not there, they had to write a check. We checked more often if there were any red flags. Don’t tell you can not see fraud coming. This did not prevent all losses, but it greatly reduced the extent of the losses. The owners of course are guilty and will probably go to jail, but the bank was incompetent in their business dealings and no doubt will have to answer for it.
Crimes of the Delta Welfare State.
@2:05 - these are the crimes of greedy and unregulated capitalists.
@12:49, the collateral - the grain - was there. But it had been sold, and Express falsely represented that it was still owned, according to court filings.
Realtor here!
I have some very nice homes in the delta which just hit the market!
If you hurry you can even pick out the color of the luggage the owners are packing to flee the scene!
But wait, there’s more! Act now and we will throw in 26 golf carts!
The farmers will be made whole by the gubment. Doesn't it usually work that way?
Besides, Bennie is the voice of the Delta in D.C.
@12:14 Speaking of restaurants in Greenwood, anyone remember what the name of the restaurant that was a sort of "private club" and you had to have a key card to get in?
This would have been very late 60s or very early 70s, and long before people were accustomed to opening doors with cards, so it made an impression on me. I was 6 or 7 years old and a friend of mine's parents took us there for his birthday. I distinctly remember that his father had a gold-colored card with a large black skeleton key printed on it that had to be inserted in a slot to gain entrance to the restaurant. I remember it being very swanky and the kids' menu was one choice: veal cutlets which I had never had before, but remember very much enjoying.
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