Monday, January 24, 2022

Farmers Want to Liquidate Express Grain

 110 Delta farmers have had enough and asked a bankruptcy judge to dissolve Express Grain Friday.  The Greenwood grain elevator is currently in chapter 11 bankruptcy.   The farmers shipped their harvests to Express Grain last fall but were never paid for their crops. 

Express Grain filed a chapter 11 bankruptcy petition in late September.  U.S. Bankruptcy Judge Selene Maddox appointed a Chief Restructuring Officer instead of a bankruptcy trustee.  The company continues to operate.  

 Agriculture Commissioner Andy Gipson said Express Grain submitted phony audits to his agency when it obtained grain elevator licenses, thus the licenses were obtained through fraud. The Commissioner is scheduled to hold a revocation hearing today for Express Grain.  

The farmers attempted to use the Commissioner's actions to their advantage. They argue:

If that is the case and the Licenses were secured by misrepresentations and/or fraud, they will likely be vacated, and EGT will be left without  the  necessary  licenses  to  conduct  business  in  the  State  of  Mississippi  going  forward. Further, if the Licenses are deemed void ab initio, EGT will have effectively operated illegally since they were re-issued by the State in June 2021....

without  the Licenses, EGT  can  no longer operate  as a  grain  dealer  and/or grain warehouse (including  any processing of grain) and, as such, its operations as a debtor-in-possession, as allowed by 11 U.S.C..§ 1108, should cease immediately....

 The Court's decision to allow the company to operate was attacked as well: 

If the facts alleged by the State prove true, the Debtor never had any right to use the grain and grain proceeds in this case and the significance of the loss to All Moving Farmers and their production lenders, who have consistently resisted the continued crushing operations by Business Debtors will have proven to be extreme.  As of the filing of this Joint Motion, it appears that the Debtor   has,   upon   information   and   belief,   burned   through   "cash   collateral"   exceeding $70,000,000.00¹⁴  less  than  120  days....

 The motion claims there are no interested buyers for Express Grain, thus there is no justification to allow the company to remain open due to a pending sale.   A footnote (#15) states: 

Moreover, as of January 19, 2022, according to the CRO’s report, no potential suitor has been seriously interested in the grain crushing facility which leads to further doubt regarding why the crushing facility has continuously been pushed as a necessary operation for any sale under Section 363 since it appears to have little value as an ongoing operation from the perspective of potential buyers. Moreover, the CRO has consistently failed to  investigate  whether  spot  sales have  been  more  profitable  than maintaining the crushing operation.

 Express Grain has liabilities over $160 million and assets of only $96 million.  The liabilities include UMB Bank loans of $70 million.



Express Grain Posts

Express Grain = Worldcom? 

The golf cart spree.  

 Express Grain task force pushes fix.

Express Grain: Is the End Nigh?  

Express Grain & UMB try to block investigation.

Express Grain prez won't talk.  

Express Grain shuck and jive continues.  

Commish moves to block Express Grain loan.  

Commissioner wants to revoke Express Grain license for fraud.  

Express Grain Update: Fraud! 

Senate Committee holds Express Grain hearing. 

This week on the podcast: Express Grain 

Shucking & jiving to bankruptcy. 

Express Grain Prez threatened. 

Express Grain collapse over $100 million. 

Lawyered up?  

Lawsuit: Express Grain shucked bank out of $71 million. 

Were Delta farmers shucked and jived?  



 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. 

 The bankruptcy judge will hold a hearing on the matter on January 25.  However, Commissioner Gipson is holding a revocation hearing on January 24.


Anonymous said...

I think the following sums it up pretty well, from page 11 of the motion:

"[Express Grain's] pending Chapter 11 proceedings should no longer continue to be used as a mechanism to maximize the recovery on behalf of but one alleged creditor [UMB] . . . from assets that are not even likely to be property of [Express Grain's] purported estates."

Has anyone seen John Coleman lately, or has he already absconded with two suitcases full of cash?

Anonymous said...

He has property in five different countries without extradition treaties with the USA. He was on a plane before this scandal even broke the news.

Anonymous said...

Where is Chipster Charles Morgan in this picture? Delta Council has always claimed to be the watchdog looking out for the farmers' interests.

Anonymous said...

1:33 PM Could you elaborate more on that? A lot of people are wondering where their money went.

Anonymous said...

4:07PM. Delta Council is a regional economic policy organization that would have no more involvement in policing corporate fraud than your local Chamber of Commerce. And yes, Chip Morgan was a wonderful advocate for Delta agriculture until he retired a couple of years ago.

Macy said...

A conversion to a Chapter 7 proceeding probably is warranted here.

Anonymous said...

So, why in the world would Commissioner Cowboy Gipson rely upon (falsified) company produced financial statements instead of readily available audited statements??!

Anonymous said...

All Hat Gipson learned sopmething by not noticing the audit documents were faked.

'Fool me once, shame on...shame on you. Fool me—you can't get fooled again.'

Anonymous said...

6:22 - I've been in the delta for 75 years and have attended more Council functions than you've had rolls of toilet paper. Where were you when Von Braun spoke under the basketball goal in Whitfield Gymnasium?

Delta Council is an advocate organization that survives on dues. Regional economic policy my ass. They have always been an advocate and voice for agricultural interests, including peons who only till the soil.

Thanks for posting us on Chipster's retirement. Who woulda known. Hope he got to keep his chair.

Anonymous said...

Following up on 9:46: The Commission simply relied on Express Grain to submit the actual audit report(s), instead of forged documents.

To me the real question is why did John Coleman submit a blatantly-forged audit report to renew the licenses one last time in June, and then not pay farmers for the crops Express Grain received, while surely knowing the house of cards would come crashing down and he would get caught?

I'll be interested to see what comes out in discovery in the farmers' suit against UMB.

Anonymous said...

9:46 pm

That’s a good question.

I am a lawyer and I fill out requests from corporate clients auditors certifying the status of ongoing litigated matters. My reports are part of the auditors report to shareholders or investors or insurers.

Why did Andy accept the doctored reports? Why not as a matter of routine demand the actual auditors report?

This can’t be the only time this has happened.

Anonymous said...

Attn 9:46 Why would. The commissioner rely on falsified documents? Answer, the same reason the farmers did little or no due diligence themselves. The commissioner probably did his job, but the documents were fake and fraudulent. Go ahead and be mad because of your own laziness and neglect.

Anonymous said...

If you can't trust a grain elevator operator, who can you trust?

Anonymous said...

Maybe find a actual farmer to run the thing.

Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel


Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS