The following post was published on The Taxpayers Channel Monday.
Today, the Farmers group, which represents almost all the farmers in the Express Grain bankruptcy case that are represented by attorneys, filed a "Motion for Summary Judgment," asking the court to throw out the warehouse receipts held by UMB Bank, StoneX Commodity Solutions, and Macquarie Commodities (USA) Inc. as invalid.
The aim of the Farmers motion appears to be to undercut and perhaps overthrow the claims by these three financing creditors that they actually own millions of bushels of beans held by Express Grain. If those beans are not actually owned by these three creditors, then the beans can be liquidated to help pay claims by all the creditors in the case.
The Farmers motion can be seen here: Farmers Motion for Summary Judgment
The legal memorandum supporting the Farmers motion can be seen here: Farmers Memorandum in support of MSJ
According to the 557 Report, UMB Bank holds warehouse receipts for 1,285,000 bushels of beans. StoneX holds 2,780,000 bushels. Macquarie holds 750,000 bushels.
But the Farmers contend that the warehouse receipts are illegal under Mississippi State law, and therefore cannot be used to represent the ownership or interest that these three creditors are claiming.
It is not clear that EG even had enough beans to cover the sum total of the warehouse receipts that UMB, StoneX, and Macquarie are now holding. Meanwhile, most of the beans have been sold or crushed already, with the money received for them parked in a court-controlled bank account until further action by the court.
According to the Farmers:
StoneX, Macquarie, and UMB are not holders of valid warehouse receipts and, therefore, do not own the soybeans covered by the warehouse receipts.
Under Mississippi law, the Business Debtors [Express Grain] are prohibited from issuing any warehouse receipts in cases where there is not actual delivery of soybeans into the warehouse for which the warehouse receipts are issued. See Miss. Code Ann. Section 75-44-61 (Rev. 2016). Regulations issued by the Mississippi Department of Agriculture and Commerce are in accord. See Subpart 2 - Administrative Rules: Chapter 10 Grain Warehouses.
StoneX, Macquarie and UMB, by their own admissions, did not deliver any soybeans to the Business Debtors. Thus, the Business Debtors had no authority to issue any warehouse receipts to these entities and their warehouse receipts are invalid as a matter of law.
There is no genuine issue of material fact as to the validity of these warehouse receipts and UMB, StoneX and Macquarie do not have a security interest in the Business Debtors' grain as a result of these invalid warehouse receipts.
Therefore, all Moving Farmers are entitled to judgment as a matter of law.
In the accompanying Memorandum of Law, the Farmers argue:
This is a simple and straightforward issue that will greatly narrow the issues for trial in the Section 557 Proceeding and reduce the expense of costly and unnecessary discovery. UMB, StoneX and Macquarie all claim to own the grain held by the Business Debtors as a result of warehouse receipts issued by the Business Debtors to them. But these warehouse receipts are invalid under Mississippi law and, therefore, cannot support claims for an interest in grain. Contrary to state law requirements, UMB, StoneX and Macquarie never delivered any soybeans to the Business Debtors. Therefore, the Business Debtors had no authority to issue warehouse receipts to them and the warehouse receipts upon which StoneX, Macquarie and UMB's claims are based fail as valid as a matter of law.
The Farmers further cite regulations promulgated by the Mississippi Department of Agriculture and Commerce, which read in part:
A warehouse shall issue a warehouse receipt only upon actual delivery of grain into storage. The receipt must be issued from the warehouse of storage, except as otherwise provided. The warehouseman shall not issue more than one receipt for the same lot of grain, except where partial receipts are desired. The total of the aggregate receipts of a particular lot shall be no greater than the total of the original lot unless additional grain is deposited. Should the depositor desire to consolidate several receipts into one, the warehouseman may issue a new consolidated receipt, but only after the original receipts have been cancelled.
A warehouseman or his employees shall not issue, cause to be issued, or assist in issuing warehouse receipts for grain that has not been delivered to a warehouse or not under their control as otherwise provided in the statute or rules and regulations. The issuer of such a receipt and the receiver of such a receipt shall be subject to the penalty provision of the Act.
The Farmers conclude:
StoneX, Macquarie and UMB knew the warehouse receipts they received from the Business Debtors were not issued in accordance with Mississippi law. They "may not be heard to say" that they had no notice of the Business Debtors' failure to follow the law. The warehouse receipts are unenforceable as a matter of law and this Court should find, as a matter of law, that StoneX, Macquarie and UMB have no ownership interest in grain held by the Business Debtors.
However, it must be noted that, even were the court to invalidate the warehouse receipts, the three financing creditors might well be able to establish their ownership of all or part of the grain through contracts showing that they indeed purchased the grain.
No hearing date has been set for the Farmers motion to be heard.
20 comments:
I've read all the EG postings and have not seen a mention or comment indicating where the $ went.
They'll need Doug Flutie for this Hail Mary motion.
Flutie, a runt, existed in the 'short rows'. This attorney is much taller.
Lmao @ 3 comments
They will find Jimmy Hoffa before they ever find a penny of this scam
Considering half of the paperwork the EG filed is probably bogus, I think this would be awesome if the court did chunk the receipts and release the grain to the farmers. Based on what all I've read on this, it may be a hail mary pass, but it only takes one good "receiver" in the endzone and you got a touchdown.
Bullshit Mountain's fixin to erupt!
There's nothing to see AND Shad said Phil was the whistleblower!
Here is the short version, as I understand it:
1. The Colemans and UMB proposed a $30 million loan, in which UMB would receive a super-priority lien for $100 million against all pre- and post-bankruptcy petition assets of Express Grain, including declared assets of $101 million. This would likely render moot all claims to the crops, including the farmers', except UMB's.
2. Then, the Department of Agriculture argued that Express Grain's permits were never valid, so that Express Grain could not have legally conducted business, i.e., buy and sell crops. Perhaps this would also invalidate the warehouse receipts and the sale-purchase contracts.
In support of this argument, the Department submitted blatantly-forged audits, provided to it by Express Grain, and based on which the Department issued Express Grain's three permits.
3. Next, the farmers argued that the warehouse receipts are invalid because Express Grain issued them without taking delivery of crops from the receipt holders, as required by statute.
I'm speculating here, but I imagine the judge is probably looking sideways at the Colemans, UMB, and their attorneys, regarding item No. 1.
9:11 - What Mountain do you think is going to erupt? Elaborate please. I’m genuinely curious about your statement. I see Express Grain owes state taxes. So my question is, when do the feds come in with their claim on the likely taxes that EG owes the feds? The Coleman’s cheated at every corner. I’m sure they cheated the Feds out too.
Lmao @ 7 comments
@9:58. I will give you an even shorter and more accurate version.
1. The Colemans are crooks and committed premeditated fraud.
@10:30pm Agreed. Just where are the Feds in all this?
Fraudulent warehouse receipts were used by EG to overstate the amount of grain on site. That induced the lenders to lend more money, thinking adequate collateral existed.
I am just confused. What was the end game?
Did the Coleman’s think they could borrow funds indefinitely and the music would never stop? Just doesn’t make sense to me. Why borrow money - and attempt to borrow more, when you will go to jail for stealing it. And there is a paper trail all along the way.
Thanks dad, for the 1% ownership in this scam.
12:17, Though 1% owner, John Coleman was the president of Express Grain, and appears to have been the prime mover. I think John Coleman probably screwed his father, and not the other way around.
Is it just me, or does there seem to be a lot of scandals involving illegal parent-child business deals these days? Is it crooked parents? Shitty kids? Drug fueled? A pervasive sense of entitlement? Too much privilege and not enough responsibility growing up? Unwillingness to pay dues? Rampant cheating? Impatience? Just plain old greed?
12:17, John Coleman is the son while Michael Coleman owns over 95% of the Express Grain and he is the dominating personality in the father/son relationship. It is well known that Michael Coleman likely knew everything. John Coleman is an atheist. Michael Coleman’s brother did prison for fraud. That family left God long ago. They do not care about anything or anyone other than themselves. Greenwood is known for its dirty tricks and con artist. They breed em and teach em, and the Coleman’s are far from alone.
Ooops!
Apparently overdraft protection at the bank doesn't fix everything!
https://caselaw.findlaw.com/ms-supreme-court/1439631.html
7:38, What does a 20 year-old case of attorney Joe Price Coleman co-mingling client funds have to do with this case?
Greenwood is known for its dirty tricks and con artist!!! Really, please tell me some more.
Post a Comment