Is a financial Armageddon hitting the Mississippi Delta farming community? The failure of a major grain elevator left a multitude of farmers without their cash or their crops. They accused a bank of keeping the insolvent float just long enough to steal their harvest without paying for it in a lawsuit filed in federal court Monday.
At the center of this controversy is Express Grain Terminals, LLC. John and Mike Coleman founded the company in 2007. Express Grain is a large grain elevator operation that serves farmers in the Mississippi Delta. Farmers deliver their harvest to Express Grain and then transfer title. The company usually pays for the harvest within a few days of delivery. Harvest season is late August and September for corn and October for soybeans.
The complaint claims the company was burdened by over $70 million in loans from UMB Bank. The bank is located in Kansas City. The debt includes a $37 million revolving loan. The bank allegedly directed Express Grain to post collateral. The collateral included almost all of its assets. The most valuable collateral was, of course the grain it held.
The plaintiff the company was insolvent by the spring of 2021 but the bank would not call any notes due. The bank instead propped up the grain elevator through harvest season so it could get its mitts on the crops when delivered. The word trap” was used.
The unsuspecting farmers delivered their grain as usual. For example, Island
Farms shipped 80,000 bushels of corn in mid – September. Express
Grain paid for the delivery with a bogus check for $410,874. The same fate
happened to other farmers who delivered their grain. The total losses suffered by the farmers are said to be millions and millions of dollars. Over 130 farmers are listed in the bankruptcy case.
The bank called everything due at the end of September and forced Express Grain into bankruptcy. The bank took all grain delivered by the farmers for the 2021 harvest season.
The farmers accuse UMB Bank of one count each of aiding and abetting fraud, conversion, unjust enrichment, and constructive trust. They seek damages as well as attorneys fees.
Attorney Don Barrett of Lexington and the Washington DC law firm Cueno, Gilbert,& Laduca represent the plaintiff’s. The case is assigned to U.S. District Judge Henry Wingate.
Kingfish note: The scuttlebutt is more than a few farmers were nailed by these shenanigans. Express Grain's bond is only $1 million. Insolvent grain elevators are a problem that has plagued the agricultural industry for decades.
Don't worry folks, this is just the first post on the subject. There is much more to cover. Stay tuned. Send tips to kingfish1935@gmail.com.
31 comments:
Surprise Surprise.. who do you think controls the banks? the federal government is Seizing crops to create a massive food shortage. Northern farmers were paid to destroy their crops. I guess they ain’t paying Southerners, they just taking. Hold on to your butts and your guns!
12:17 (insert eyeroll emoji) You are totally clueless.
I approved it for humor purposes.
Don is probably the best lawyer in the state and these farmers are lucky to have him represent them. He is pushing 80 however.
With that said, Wingate is the trial judge and that is the worst draw for the farmers because this case will languish on the docket far past Don’s eternal demise leaving the farmers with lesser lawyers than Don.
Bad bad luck.
This is not good. It’s very hard to trust a banker and with the way things are going south economically I suppose this won’t be the last time we see something like this happening. For them to attach the farmers products is absolutely wrong. It’s morally in the gutter. I hope the farmers get a settlement but with the courts this may take years. So, I’m sure they will have to take out a loan due to someone’s immoral acts
And to think that some people believe the biggest problem facing Mississippi today is 80 emails sent to the DeSoto County School District.
12:17 I hope you are aware that the COVID vaccines contain radio transmitters so that the “government” can watch your every move. Fortunately, your tin foil hat should counteract the radio waves that would otherwise be transmitted out through you ears. Stay vigilant my friend.
What a terrible situation for the victims.
I doubt justice will be fast, if at all.
Where's Bennie? Oh, that's right, doing Pelosi's bidding tilting at windmills.
After reading the 12:17 PM post above I called my stock broker to sell my Tesla stock and invest heavily in tin foil.
@12:17
Please post more....you're a hoot.
Well done Kingfish. I sold have never heard about ghost otherwise.
The fraud and corruption just never ends in this State. While the bank(s) should be hung on the barn door, the elevator owners should be crucified right next to them.
@1:12: I couldn't agree with you more that Don Barrett is the best lawyer for the plaintiffs in this case. When I started reading about the case, I thought it probably was a Don Barrett filing.
@3:44
That's hilarious. That joke landed so hard. The funniest part is that you still call a stock broker to place orders! love it.
Is this business in Greenwood? Is this the eye Dr. Mike Coleman and his Son? Hate it for the Farmers! Hopefully they can get paid for their grain! If this is the Eye DR, hate it for him as well! He has helped many people over the years!
Thanks KF for posting this……this is the saddest story ever as the farmers fight to get a great crop out of the ground and sell it to EG and lose everything. Now they have to figure out how not to lose their farm. And it’s also the ancillary providers that fall. This is devastating all the way around. Where is the ABL field exam the bank did? …..this is a horror movie unfolding .. when this news hit, your could hear the large gasp from the Delta.
This would make a good base for movie like: "Country" or "The River". Are the crop lender Bank's UCC filings worthless?
What is the. Big deal? The grain is still there in the elevators. Farmers, go back and get your grain, take it somewhere else, and sell it. Why is this so hard to comprehend?
Check out the article on the front page of today's New York Times about Mississippi delta farmers displacing Black workers with White workers from Africa, and then get back to us with your comments about it.
Happened with Barrier Cotton Co. too. Too many here too young to remember as well as several other cotton buyer companies did the same thing. Hey and you wanna know what? Those dudes never went to jail or lost one nights sleep. A farmer risks it all from sun up sun down. Keep your friends close and your enemies closer.
@6:59
Street talk in the Delta says that the grain is in fact *not* in the bins, or at least not in any materially sufficient quantity to satisfy the liabilities or do something along the lines of what you have suggested.
Several farmers have made demands exactly as you suggested, only to receive a response from EG and the senior secured lender that the grain doesn't belong to the farmer anymore.
All the farmers owns is a receivable - that unfortunately will most likely turn out to be materially worthless.
Bad deal all around. This story will be very sad and fascinating to watch unfold. We're only in the bottom of the 1st with this one.
Attn 8:26 Are you saying that this grain that was stolen from the farmers (through bad checks) is now the property of the financial institution? I have a hard time believing that. That is like me stealing my neighbors car and using it as a trade in. I can assure you, the car dealer would eat this loss.
The grain farmers need a cooperative or get smarter on the markets themselves. When you sell your crop to the local merchant, you are surrendering the profit to them. The earliest Mississippi cotton producers aggregated their 1799 crop and sold it NOT in Natchez, New Orleans, or New York...but in London where they used the London exchange to purchase cargoes headed to the Far East. They used a NY merchant named Aspinwall, whom Gov. Sargent knew to effect the shipping. They made a killing and learned something about markets. The delta cotton producers got wise on marketing their crops many years ago when they formed their coop, Staplcotn, a hundred years ago. These grain producers need to do the same thing.
@8:45 -
@8:26 here -
Basically, yeah, that's correct. As alleged in the lawsuit if you read the doc that KF posted, the farmers delivered grain to an elevator that wasn't able to pay them, and the senior secured lender knew that.
The neighborhood car theft example doesn't parallel exactly because there's a paper trail on the title of that vehicle that any dealer would follow before accepting the car and paying for it. Grain doesn't work that way.
Once the grain is delivered on a contract that is made pursuant to NGFA rules (google it) then the grain no longer belongs to the farmer. All the farmer has at that point is a an unsecured trade receivable.
That's why the farmers are suing the senior secured lender - EG is essentially judgment proof at this point - EG will have materially nothing for the farmers (and other unsecured creditors) once the secured creditors get done with them, and the farmers are alleging that the senior secured creditor knew that but sat on that info waiting for a better time of year to call the note(s) in hopes of mitigating their losses when they eventually did push the lever to flush that tird that they saw floating in their toilet bowl.
The is a very strong grain cooperative called Farmers Grain Terminal. They are headquartered in Greenville but have a buying point in Greenwood. FGT has been in existence since the seventies I think. They are very good marketeers of grain. Express Grain was offering a much higher basis. That’s the reason some farmers sold to EG.
This is rough.
I bet the farmers go to a COD model after this.
Sounds similar to some stories I've heard about livestock houses. A farmer brings his cows to the sale barn, they get sold, the buyer pays the sale barn and the sale barn stiffs the farmer.
Farming is hard enough without this kind of shit.
@6:59 and others saying farmers should “just go get their grain.” If you know anything about bankruptcy law, once the entity declares bankruptcy, all “their” assets become frozen and no one can get anything from them. The title to the grain was passed to the grain elevator upon delivery.
Know how much farmland BILL GATES owns ? Look it up folks. Hmmmmmm, Bill Gates now owns our crops and our minds with his Covid virus. Next up ? The great reset ! It's coming folks and the 2022 election cycle will not stop it. Breaking laws in full view....rigging elections top to bottom in full view.....ignoring real science for all sorts of things in full view.....CRT in full view......our children's conscience stolen by tech in full view.......literally printing money to create this 30 year high inflation to flatten the lower middle class in full view. Yes, there is a lower middle and THEY are never talked about.
Attn 9:51 The question should be, “when is the ownership conveyed?” Is it when the check is written, or when the check is cashed. If it is when written, it would appear the farmers are out of luck. If it is when cashed, it would appear the farmers should still own their seeds, since the checks cannot be cashed.
Attn 11:59
@9:51 is right
when a check is written has nothing to do with the timing of ownership conveyance
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