This post is reprinted with the permission of The Taxpayers' Channel in Greenwood. It was originally published yesterday.
Today, the bankruptcy court held a status conference in which a potential settlement of the 557 grain interests in the Express Grain bankruptcy case was discussed.
The April 18th 557 trial that was scheduled will be postponed indefinitely, while the deadlines for trial preparations were stayed at today's conference.
The 557 Final Determination is the trial process at which the parties litigate who owns the grain, and who has a special legal interest in that grain.
When the bankruptcy was filed, it soon turned out that there were more claims to the grain than there was actual grain in the EG warehouses.
The farmers who delivered their grain were left unpaid to the tune of around $46 million. The warehouse receipt holders claimed dibs on over 4 million bushels of soybeans that they had bought. UMB Bank claimed a collateral interest to back over $70 million in loans it had extended to EG. And dozens of other creditors were left unpaid in amounts totaling more than $50 million.
In all, $214.5 million in claims were filed against EG, but the entire company is headed for liquidation at only around $85 million in cash.
To read our reporting on the amounts of money owed the creditors, and more explanation of the 557 process, see here: Express Grain bankruptcy claims total $214.5 million
At today's status conference, the various farm groups were represented, as well as UMB Bank, StoneX, Macquarie, Bank of Commerce, First South Farm Credit, Guaranty Bank and Trust, Travelers Insurance, Southern Ag Credit, Albert Altro (the examiner appointed to investigate John Coleman's personal bankruptcy case), and the MS Department of Agriculture and Commerce, among others.
The Court said it is very surprised and very happy that the parties have gotten to where they are. The judge stated it was "a miraculous feat. None of us thought we'd be discussing a settlement."
Several of the attorneys who helped draft the settlement explained in general terms how it would work, but no money amounts or percentages of payout were provided.
Farmers are being divided into four main groups: consenting, disclaiming, non-consenting, and non-participating.
Consenting farmers have signed, or will sign, the settlement agreement.
Disclaiming farmers aren't going to fight their claims at the 557 trial, but will receive some attorney's fees.
Non-consenting farmers will go to trial at the 557 hearing to litigate their interests with the banks and financing companies.
Non-participating farmers are those who have not been represented or made any formal claims.
The court expressed concern repeatedly that the non-participating farmers must be notified that they can appear to defend their claims before their claims are converted into simple unsecured debts.
The attorneys will present, at the latest by this Monday, a 9019 motion, which is the method by which the settlement is approved and implemented.
A settlement fund will be created out of the money assets of EG, and also reserve funds will be set aside to cover those farmers who continue to litigate their claims in the 557 process.
At no time were figures provided as to what percentage of farmers have elected to consent, or non-consent, or disclaim the settlement agreement.
A threshold of farmers must join the consenting group in order for the settlement to succeed and be implemented by the court.
Perhaps we will be able to understand better the actual terms of the proposed settlement once the 9019 motion is filed this weekend.
8 comments:
Attorney's always win!
I should have gone to law school. Lawyers making $$ on this sh*t show.
Will they have to sell some of their Bentleys and condos on Grand Cayman?
I wonder whether the first two commenters were the same ones who insisted all along that the farmers will "never see a dime."
Now that the farmers stand to get some compensation, you're going to bitch about the attorneys getting paid for their work?
Should the attorneys work for free? Ridiculous.
Settlement for farmers is 20%. Other option is to disclaim and allow pursuit of fraud case in district court.
Really strange to me that they are discussing settlement this early. The attorneys, would make a lot more to drag out for years, it actual seems that this would be best for everybody, to cut the fighting to a minimum, liquidate everything and payoff what's left as quick as you can.
What is the status of that lawyer from Lexington’s (Barrett?) lawsuit?
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