Friday, November 12, 2021

Lawsuit: Express Grain Shucked Bank out of $71 Million

  A  lawsuit accused Greenwood-based Express Grain Terminals  of defrauding a Kansas City bank out of $75 million through phony reports and receipts.  The company is currently in bankruptcy. The implosion of the grain elevator operation threatens hundreds of Delta farmers, banks, and even a public utility with severe financial losses.

Kansas City bank UMB Bank sued Express Grain Terminals, Express Grain Processing, Express Biodiesel,  Dr. Michael Coleman, and his son John Coleman in Leflore County Chancery Court on September 28.  The Colemans own Express Grain Terminals which in turn owns the other two companies. 

Express Grain Terminals opened in 2007 and is a major grain elevator for farmers in the Mississippi Delta.

Express Processing open in 2015 and Express Biodiesel opened in 2018. The Coleman’s own Express Grain Terminals. Express Grain owns the other two companies.

 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 the loans imposed several covenants on the bank such as restrictions on borrowing and spending.Express Grain was supposed to provide financial statements to the bank by May but failed to do so.

The fun began in September. The complaint states:

56. On or about September 1, 2021, borrowers provided a borrowing base certificate and grain inventory and market position summary reflecting 2,238 359 bushels of soybeans at the company elevators, with warehouse receipts issued for 505,000 bushels, warehouse receipts to plaintiff for 685,000 bushels, and company-owned soybean inventory of 1,048 359 bushels. Borrowers represented that the value of the company on soybean inventory was $15,051,810, and that borrowers had a total company-owned and not warehouse receipted grain inventory of 16,096 $761.

 Unfortunately, little of it was true. Express Grain told UMB it only had warehouse receipts for 1.585 million bushels of soybeans on September 22. However, a check of electronic warehouse receipts through eGrain on September 23 showed the company had warehouse receipts for 4.9 million bushels of soybeans. The difference between the two reports was $42.8 million as the borrowers falsely claimed they still owned the sold commodities. The inflated inventory reports was thus used to allegedly lie to the bank to avoid default.

The bank had enough and declared the company in default on loans of $70.7 million.

 UMB asked the Chancellor to appoint Brent King as receiver and prevent the defendants from transferring any collateral. The plaintiff also asked the Court to declare the defendants in breach of contract and rule they were in default on their notes. A TRO was requested as well.

Baker Donelson represents the bank.

The lawsuit essentially forced the companies into bankruptcy because they filed bankruptcy petitions the very next day. The bank withdrew the lawsuit on November 3.

Ironically, the afflicted,er, affected farmers filed a class-action lawsuit against UMB Bank in US District Court earlier this week. JJ reported yesterday:

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. Earlier post.

Hundreds of farmers found themselves with neither crops nor cash and are forced to wait in line in bankruptcy court with unsecured claims while other farmers have liens on their crops that disappeared into the Express Grain black hole.


Anonymous said...

There’s a reason we stay last. Crooks always stick it to the working schmuck.

Anonymous said...

Those "working schmucks" haven't been on a tractor or combine in their lives, almost to the last one. Just one of the Farm Corporations suing has gotten 7 million dollars in Farm Welfare. They hire Mexicans to run the machines, and most of them collect a GubMint check from far away from fields.

This is about fighting over outrageous GubMint Welfare handouts for double processing corn you can't eat. Or GubMint subsidized beans for China.

None of these folks is putting food on an American's plate. But they howl poverty when one of them swindles the other, especially on BioDiesel Double Subsidy GubMint Payouts.

It's a big ole USDA Ponzi Scheme, presided over by Roger Wicker and Bennie Thompson and Charles Grassley GOP and Debbie Stabennow, Dem.

The Swamp Establishment in DC pays out Big for our Swamp Farmers in MS. Who now bleat for even more GubMint money for Pumps to keep the Swamp Dry for Subsidies for things we don't need but make them Big Money.

Anonymous said...

God bless the farmers in all of this epic, far reaching case of fraud and corruption. They are the only value-creating industry left in the Delta, and depending on their debt, this may result in a massive number of resultant bankruptcies of farmers, their suppliers, and their creditors.

Anonymous said...

When you look at UMB Bank’s 10-Q financial reports for 2021 you notice they had a $31 million loan charge off in the Specialty Finance division in the second quarter of this year. There were no other charge offs in that division at any other time during 2020 and 2021.That number coincides closely with figures in the Baker Donaldson filing showing overstatement of borrower assets. At first glance this seems to support Don Barrett’s contention in his suit that the bank waited until a more favorable time to move against their borrower. After recognizing a loan loss bank’s usually spend some time perfecting any defects in their loan documents before they initiate a collection action.

Anonymous said...

Maybe I skipped over it and missed it, but who is the public utility?

Anonymous said...

I absolutely understand the lawsuit.
What I don't understand is whythe grain company isn't getting any grief for its actions.

Anonymous said...

Read up on BioDiesel, and you'll understand why our "Bidnessmen" are cutting each other's throats over the GubMint money paid for corn no animal can eat. In the middle, looks like some Ponzi scheme or coverup.

Since 2005, it's been Billions in payouts. Several other threads have these folks involved in other shenanigans, as the money's so good. Did you not see that an alleged polluter can make 40 million a year at just one plant, based on a Dollar a Gallon GubMint Subsidy?

Did you ever wonder why our Farmers grow inedible corn and more soybeans than the US ever eats and cotton that is expensive and unused?? Farm Welfare.

But, you'll never hear that from Wicker or Thompson's offices, or the MSM.

Ethanol, carbon sequestering, bio fuels, etc.

That's the next sin, carbon sequestering, after 9 Trillion in Pandemic money to the already filthy rich.

And about a trillion more was proposed for this by Biden, who is one of the DC Establishment crew, from Bushes to Gores to Clintons to Obamas to Bidens, whose buddies stand to make out again.

Did you ever wonder why Bill Gates is the nation's largest farmland owner????

Think, folks.

Meanwhile, Cletus has been drawn to shiny things like "Covid China" harrumph. By design.

Anonymous said...

@ 6:49 - Is that you Vandevender (Tate's finance chairman who wants to own half the land in the delta) and Archie's college roommate?

Anonymous said...

Sounds like a few people need to be dropped off at the Train Station.

Anonymous said...

Father and Son are laughing all the way to the Cayman Islands. It will all be there after they serve their 60 month sentences.

Anonymous said...

Now that Donna and Tom no longer have their rag in print, they have more time to post here.

Anonymous said...

6:49 returns exactly five hours later in another post.

Ima get me some of this corn and soybean pie and eat up....

"Did you ever wonder why our Farmers grow inedible corn and more soybeans than the US ever eats"

Guess he has no clue what winds up in animal feed and cooking oil. Poor boy.

Anonymous said...

@ 6:49 aka 11:49...While your showing your utter ignorance, you might find this link helpful.,as%20making%20ethanol%20and%20polymers.&text=Corn%20is%20not%20just%20corn.

Anonymous said...

And when you finish with that one...try this one:

Anonymous said...

The utility company mentioned is Greenwood Utilities which is owned by the city of Greenwood.

Please pray for the farmers who will likely lose their businesses. Many of these farmers are young and undercapitalized. It’s really a sad situation.

As for the national ag policy frustrations raised in this blog, in my 52 years of farming in the Delta, my banker has never been very interested in them. For some reason he wants to know what am I doing to avoid prior losses caused by weather, price volatility, embargoes, trade wars, long term lack of profitability, etc.

Anonymous said...

While the Grain Company was struggling, I can guarantee the owners took their big salary and pranced around the delta like they were big shots with plenty of money. I agree with the poster at @6:52 that a trip to the Train Station wouldn’t be a bad idea. Struggling in business is one thing. Being a crook is another.

Anonymous said...

8:52 - The 'utility company' is virtually irrelevant in this scenario.

Anonymous said...

The grain elevator folk are Mississippi 'blue bloods' originally from the first settlers below Natchez called the 'Jersey settlers'. On the plaintiffs side of the suit the Wyatts were farming the lower delta a hundred years ago if its the same ones that are from Holmes County.

Anonymous said...

Our neighbor Old Mexico has shifted to a national consumption type of ag policy. If you are a large consumer of a staple yourself...why ship it off? The large producers of Mexico don't like it, but most of the farmers do. USA farm policy is serving international policy as well as domestic goals and it could be simplified if states set their own goals or national policy was rationalized.

Anonymous said...

Farm policy seems to de-populate ag states and move to large scale operations. We need a farm policy that favors middle capitalized and independent producers.

Anonymous said...

Not to worry. State-controlled cannabis farming will solve these issues. As a side benefit, the young Pikes and KAs whose families have farmed for decades, will suddenly decide to stay on the farm and not move to the city. The smell of weed in the cab of a John Deere is a drawing card.

Anonymous said...

If Joe Biden did not pay $450,000.00 to each separated illegal alien, maybe he could have paid these Americans who live and farm in The USA.

Anonymous said...

November 12 6:49

You have no idea what you're talking about. More than one small farmer around Greenwood had his rear in a cotton picker well into the night last night--many of whom have no idea whether they'll get payment for soybeans they sold to the nefarious Colemans.

Anonymous said...

[QUOTE]The grain elevator folk are Mississippi 'blue bloods' originally from the first settlers below Natchez called the 'Jersey settlers'.[/QUOTE]

Wonder if there were more crooks further back in that gene pool? The hardworking early settlers who came in and broke the land to farm handled situations like this with a noose in their day, kin or not.

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