After hiding from Commissioner Andy Gipson, Express Grain Terminals, LLC will fight the revocation of it's warehouse license by the Mississippi Department of Agriculture and Commerce in February. The company filed a notice of appeal on the revocation in Leflore County Chancery Court on March 11.
Agriculture Commissioner Andrew Gipson revoked the warehouse licenses to Express Grain Terminals after discovering the company repeatedly submitted phony financial statements to obtain the licenses. State law requires grain elevators to submit financial statements to the Mississippi Department of Agriculture and Commerce as part of their license application and each year thereafter.
Express Grain lost over $21 million but hid the losses as well as other damning information from MDAC. President John Coleman submitted fraudulent audits that lacked most damaging information Instead of submitting the audits prepared by Horne LLP.
The Commissioner held a hearing on February 4. The Commissioner acted as the presiding officer. Express Grain owners Dr. Michael Coleman and his son, John, did not appear at the hearing. Post on hearing.
The notice argues:
This finding of fact/conclusion of law is appealed from because the statutory authority given to the Commissioner does not authorize him to make findings of fact or conclusions of law with respect to whether licenses were ever lawfully issued to EGT; and The Commissioner exceeded his authority and ability to declare that the Licenses and grain dealer authority were revoked ab initio and were determined to be null and void ab initio and without legal effect since July 1, 2021.
4. The Commissioner lacked authority to make the above described findings of fact and conclusions of law in connection with whether the Licenses were ever validly issued and/or whether they were void ab initio.
Express Grain claims the statutes do not "authorize" Commissioner Gipson to determine whether the licenses were lawfully issued. Attorney Craig Geno represents Express Grain.
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This week on the podcast: Express Grain
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Synopsis
Express Grain Terminals opened in 2007 and is a major grain elevator 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 two companies.
Express
Grain ran into some financial trouble a year ago. Several farmers
complained to MDAC in December 2020 that checks for their harvest
bounced. However, the company made good on the checks. However, the
company owed over $70 million to UMB Bank. The company submitted phony
financial statements to the state when it renewed its license in the
spring of 2021. Word circulated among Delta farmers during the harvest
season that the company was in trouble.
Express Grain President John Coleman assured farmers everything was okay in a September 28 letter:
UMB Bank sued the company for fraud on the same day in Leflore County Chancery Court. UMB had issued a $40 million revolving loan and a $35 million term loan to the defendants. The bank extended the loans several times. The bank allegedly caught the company submitting false financial statements. UMB declared Express Grain in default on loans of $71 million. The lawsuit sought repayment of the loans and asked the Chancellor to place the company into receivership. Earlier post.
Express Grain filed a petition for Chapter 11 bankruptcy the next day.
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.
The damage does not stop with farmers losing their crops. More than a few banks place liens on harvests when farmers borrowed against them. The bankruptcy means those banks could lose the collateral on those loans.
Some farmers have gone to court to get their harvests back. 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.
Commissioner Gipson said Express Grain submitted phony financial statements when it applied for the renewal of its license. He obtained copies of the audited financial statements for the last three years from the company's accountant, Horne LLP, and compared them to those filed with his agency. The Commissioner said the true audits show the company was suffering a $20 million loss while those filed with his office showed a thriving company. The auditors also stated in their notes that it was doubtful the company could continue "as a going concern."
The Commissioner asked the Court's permission to investigate the company and made it clear he wants to revoke Express Grain's license. However, Express Grain and UMB Bank objected to any investigation of the grain elevator.
A hearing was held on February and the Commissioner revoked the license on February 11. Bankruptcy court filings in March revealed Express Grain sold the same crops to multiple companies.
27 comments:
Any case brought against the state has to be brought in Hinds County per the state constitution.
oops-
This action will of course eat up hundreds of thousands of dollars by diverting the money to attorneys as opposed to having the money set aside for the duped farmers. Any idiot can see this can in no way benefit those maltreated, the farmers. Please prove me wrong.
Will the Commish show up in court wearing a 10-gallon hat and strapped with a six-shooter?
I don't know Craig Geno. He is probably a fine attorney. He might be a fine man as well. However, I couldn't represent these Coleman crooks. I couldn't sleep at night representing scumbags who knowingly, deliberately, and purposely defrauded people. I just couldn't do it.
The cracks about Gipson are so tired and worn out. All you shoot is blanks.
Attn 1:04 I don’t think Mr. Geno is buying a summer home in Leflore Co. (Greenwood).
It doesn't sound like EG has much of a defense. Submitting fraudulent audits typically gets most folks into a heap of trouble. The Colemans are lucky they aren't behind bars.
I wonder if you have to present that defense at the commissioner's hearing if you are going to later assert it at an appeal.
11:36, "the licensee, if dissatisfied with the order of the commissioner, may appeal to the chancery court of the county where the grain warehouse is located" Miss. Code Ann. § 75-44-25(2).
@2:08 I never said Mr. Geno had to be friends with them. I believe everyone deserves representation. However (and maybe this is why I'm not an attorney), I could not work to get someone out of trouble who is clearly guilty. I couldn't sleep at night knowing that I got a guilty rapist off of charges on a technicality. That's just me. It would bother me.
For 1:45 PM - Will Andy arrive at the hearing riding his stallion, or be more low key with a gelding?
I don't know Geno either, but what he is doing is no different than the numerous lawyers with the big-name law firms that represent insurance companies who try to get out of paying claims that are legitimately owed.
Swayze is right.
Gipson does not have authority to revoke a license.
Maybe he should but as of now he doesn’t.
This likely has huge insurance coverage implications.
12:04 PM There is no possibility the farmers or local banks will ever get a penny.
Usually when I attend agency hearings, the AG provides a hearing officer. Is such required in a hearing such as this one?
At this point, if I lived in Greenwood, I would drive to Memphis to see an eye doctor before I would go to Coleman Eye Center in Greenwood. Screw these people. They have ruined lives by being far more than bad businessmen. They have been liars, cheaters, con artists, swindlers, fraudsters, thieves, and snake oil salesmen. Somebody needs to whip both of their asses (John and Michael).
So Coleman commits fraud by submitting bogus financials, which could be prosecuted as crime. Commish rescinds license based on phony financials. Colemans now sue to say liscense shouldn't be revoked. Are they stupid enough to put into court records incriminating evidence? Sounds like they are. The feds are getting close and this tactic is probably just about as stupid as it gets. If I were the state, the first thing I'd do is ask about the fraudulent financials and either get their side on record admitting they were fraudulent or taking the 5th. Either way, they will regret taking this to court.
8:00 pm
Viscerally I agree with you.
These folks are scum. They hurt lots of people. Ruined them.
But a state agency works within its confines. It can only do what the law says it can do - grant licenses.
There is no “you can revoke the license” clause.
There is good reason for that…what if Andy just didn’t like someone and he revoked their license for no reason?
It’s good theatre for hat wearing types but he knows he’s wrong.
Discovery should be top shelf comedy in that lawsuit
BOTTOM LINE:
The hillbilly Commish is statutorily required to reauthorize these entities EVERY YEAR. When he should have been looking out for the farmers in this state, he was busy trying not to regulate a... wait for it.... a plant (Cannabis).
Maybe he should be in his office investigating these businesses, like he is required to, to make sure they are not ripping off the Farmers he was elected to protect and advocate for. It is in his title for goodness sakes. Thanks for nothing Goober.
You elect a joke, expect a laugh.
Dr. Coleman has been practicing successfully for many years. I suspect he’s guilty of nothing more than providing financial backing to his son’s business enterprise, which I and most of you would probably do. I doubt he was aware of the fraudulent financial statements. However, he did personally guarantee the debt, so he will likely suffer serious financial consequences. It’s a bad situation on many levels.
Thanks for your input, Doc (9:45).
@9:45. It wasn’t his son’s business enterprise. Dr. Coleman owned 99%. If his son is the crook, why has he not fired him and pressed charges against him like he would any other employee? Why has he not sued his son like he would have any other business partner? The doctor could see clearly (pun intended) what was happening. I don’t care how long he has practiced. These two guys have ruined families in the delta and they are laughing and refusing to testify. So screw them both.
Dr. Coleman had a vision - greed.
(1) If a grain warehouseman is convicted of any crime involving fraud or deceit or if the commissioner determines that any grain warehouseman has violated any of the provisions of this chapter, or any of the rules and regulations adopted by the commissioner pursuant to this chapter, the commissioner may, at his discretion, suspend, cancel or revoke the license of such grain warehouseman.
Miss. Code Ann 75-44-25
@9:45. Your scenario (fictional). Dr. Coleman loans money to his son. His son starts the business and the son owns 100% of the business. The business fails. Dr. Coleman was simply a lender and is stuck just like any other lender. This would be "providing financial backing to his son's business enterprise" (your exact words).
The actual TRUE scenario. Dr. Coleman OWNS the f***ing business. He owns 99% and the son only owns 1%. So they are business partners and co-owners. So Dr. Coleman is damn sure responsible for what happens. It's not his son's business enterprise. It is THEIR business enterprise. They own it jointly. If the minority owner (John Coleman) is the only crooked one in this matter, then why is the majority owner (Michael Coleman) not suing the crap out of his business partner?? Answer that question for me.
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