This post is reprinted with permission of The Taxpayers Channel.
According to inventory reports and warehouse receipts examined by The Taxpayers Channel, Express Grain sold soybeans to at least one financing company that it didn't actually possess.
This particular aspect of EG's fraudulent conduct has not been discussed publicly to this point, though it has been discussed briefly in at least one court hearing.
At the time of its bankruptcy filing on September 29, 2021, EG had in its possession 3,264,857 bushels of soybeans. See page 3 of the "Amended Grain Report" filed with the bankruptcy court on January 17, 2022.
But the problem was, as of that date, EG had already sold all the beans it possessed to UMB Bank and StoneX.
In fact, as of September 29, 2021, UMB Bank and StoneX actually owned more soybeans than EG possessed in its warehouses. StoneX actually owned 2.78 million bushels of EG's soybeans, and UMB Bank owned 1.285 million bushels, totaling 4.065 million bushels of soybeans, or 800,000 bushels more than EG actually then possessed.
On top of that, the day before EG filed for bankruptcy, it sold an additional 750,000 bushels of soybeans that it didn't possess to Macquarie.
Macquarie set forth the timeline of its bean purchases from EG in its filing detailing its interests in the bankrupt estate.
At the time of its bankruptcy filing, UMB Bank, StoneX, and Macquarie actually owned 4.815 million bushels of EG's soybeans, or 1.55 million bushels more than EG actually possessed.
All three companies had purchased beans from EG but had not actually taken delivery, leaving them at EG's warehouses in storage.
EG had issued Warehouse Receipts to the three companies showing their ownership in the stored beans. See page 2 of the "557 Report Supplement".
t is possible that previously, EG had sold beans in its possession to the three companies, and then stole the beans to sell to other customers, or to crush at the EG crushing plant, resulting eventually in EG possessing fewer beans than were owned by UMB Bank, StoneX, and Macquarie.
But the final sale of 750,000 bushels to Macquarie was of beans that EG simply did not possess.
UMB Bank called its loans to EG three days after it discovered that EG had been selling inventory to StoneX and Macquarie that the bank had been told were still owned and held by EG as partial collateral for loans to EG approaching $70 million. EG filed for bankruptcy 5 days later.
To read our previous reporting of UMB Bank's most detailed description of how it was defrauded by EG, see here: UMB Bank levels new fraud accusations against John Coleman and Express Grain
It appears that UMB Bank is now worried that its $70 million loans were not adequately backed by collateral. The physical assets sold for around $25 million. Most of UMB Bank's additional collateral was based upon EG inventory.
At time of filing bankruptcy, EG had a non-soybean inventory of $13 million, with soybeans valued at $41.3 million. But all those soybeans were actually already owned by StoneX, Macquarie, and UMB Bank.
Even if UMB Bank is able to claim successfully its 1.285 million bushels of soybeans (valued at around $16.7 million), that would leave the UMB Bank's $70 million loans backed by only $54.7 million ($25 million + $13 million + $16.7 million).
That would mean that the balance of the $70 million debt, around $15.3 million, is actually unsecured debt.
The unsecured portion of the UMB Bank debt would then be added to the $41 million owed the farmers, and the tens of millions owed to others, as unsecured debt, which is paid back only after the secured debtors are made whole.
22 comments:
Crazy that if only they could’ve held out until the pending food crisis, they would be able to benefit from the upcoming federal intervention and also use the hunger induced chaos and civil unrest that we will soon experience, to hide their misdeeds.
'pending food crisis'?
Bull-shit!
Chinese firms have been caught “borrowing” industrial metal holdings from shared warehouse space, to use as collateral for government backed loans. I am not surprised that such dishonesty and greed also exists here.
Zero Mostel and Gene Wilder! Thanks KF!!!
"It appears that UMB Bank is now worried that its $70 million loans were not adequately backed by collateral. The physical assets sold for around $25 million. Most of UMB Bank's additional collateral was based upon EG inventory."
Maybe shit will finally start running UP-hill for once in this debacle. Scam the farmwrs first; scam the financiers second. Classic American Greed (cue amazing TV show theme music) playbook in action.
Act III usually involves politicians, charities, universities, etc. having to explain why they received money from the scammers. We will see if the normal Acts III and IV incvolve the typical plot lines.
How many people knew this and said nothing? spines are in short supply these days
Actually, the banks and finance companies were defrauded long before the farmers were. The finance fraud goes back at least a year before the farmers delivered their grain and then weren't paid.
The Ms. Department of Agriculture has determined that EG's permits were procured by fraud. If the court rules that EG's permits were void ab initio, then is was not licensed to do business when it took possession of the crops from the farmers, then "sold" the bushels and/or pledged them as collateral. There is also an argument before the court that the purchase of the crops by these entities are void, as in violation of statutory law.
I'll be interested to see what happens if/when all those transactions are unwound.
That's an incredible pile (and growing) of money that still hasn't been shown where it went.
Worldcom of the Delta.
People really don't care. They are still going to Dr. Coleman's eye clinic. People tolerate a crook, thief, swindler, cheater much better than I do.
What's next ? We find out they also applied for and got 20 million in Covid funds they misused ? Hell, if all the elected and their help can do it..........
All of the grain has been sold. The bankruptcy court will decide who gets the proceeds. End of story.
Will never happen, but the bank(s) should be at the end of the line for payouts. They rolled the dice. The farmers did not.
4:30 - I doubt that will be anything near the "end of the story." Wait until the federal criminal shoe drops ...
This here mess is starting to look like Beef Plant #2.
Except it's called a Pork Plant when it's fat hogs on the rail.
Woo pig sooie!
I forgot to watch the auction.
Did anyone see what the chinese golfcarts sold for? Weren't they fully loaded with bling and eye candy?
A person would think they'd sell well in the delta! Ride out to check your bean bins for shortages in style!
@5:36 where is Dr. Michael Coleman in all of this. From the published accounts of this fiasco, he owns 99% of this “company” and has personally guaranteed loans approaching 70 million dollars, yet no one seems to be expecting him to pay what he has guaranteed.
@7:52 lol like what are people smoking to think you can pick up an Mississippi eye doctor by the ankles, shake him upside down and have anywhere near $70 million fall out of his pockets?!
That guarantee is probably worth about what those 'warehouse receipts' are. Not much more than tree fiddy and that's on a day that don't end in a y!
John P. Hey - Thank you for that incredible revelation - telling us to expect federal charges since bank and wire fraud are involved. What would we do without yee?
10:13 I was responding to a previous comment that the story ends when the bankruptcy court decides who gets the proceeds.
@ 10:13 what a smart ass you are. John Pittman Hey is a great reporter and is doing a fantastic job reporting this matter. Not everyone is familiar with bank & wire fraud & don't realize they are federal charges. There is no need in you being such an ass. Leave John Pittman Hey alone. I don't know either you or him, but I know a smart ass when I see one.
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