Menu
10:31 am
Fair, 49°
     News Flash    Friday, March 29, 2024
 
News Flash Subscribe to News Flash Emails
Express Grain asks to pay management costs of $465,751.58 to outside restructuring firm

Tuesday, December 14, 2021, 6:30 pm News Flash Archive

Tuesday afternoon, Craig Geno, the attorney for Express Grain, asked the bankruptcy judge to authorize payment for the first 8 weeks of services provided by CR3, a "turn-around" firm offering restructuring management for distressed companies such as Express Grain.

The bill for the first 8 weeks of services by CR3 totals $465,751.58.

For copies of the motion to pay, the invoices, and the itemization lists, please see here:
Motion to Pay Fees
Management Invoices
Invoice Itemizations

So far, the court has approved only the interim appointment of Dennis Gerrard from CR3 as the "Chief Restructuring Officer" to help guide Express Grain through its bankruptcy. The final appointment of Mr. Gerrard has not yet been ruled on by the judge.

Several of the farmers and other creditors have objected to the appointment of CR3 to manage the company, arguing that they are all wasting money that should be used to pay off the farmers and other creditors.

But today, the court also rejected a petition by a large group of farmers to appoint a trustee to liquidate Express Grain, leaving open the possibility that Mr. Gerrard and CR3 will indeed be appointed as the final "Chief Restructuring Officer" of Express Grain.

All of this raises the question: just who is running Express Grain these days?

All of the original bankruptcy schedules were signed under oath by John Coleman.

But according to a petition filed on November 17 by Express Grain:

The Debtor's Board of Directors met during the afternoon and evening of November 16, 2021, and resolved to not only designate Dennis Gerrard as CRO, but to designate Dennis Gerrard as CRO with ultimate and final decision making authority in this Chapter 11 case. The Board of Directors will remain intact, and will continue to provide advisory and consulting services with the CRO and retains the rights to bring to the Court's attention any differences it may have with the major decisions of the CRO in this case going forward. By this Amended Application, Debtor seeks (a) authority (i) to employ and retain CR3 to provide a CRO, to provide additional personnel, and to grant the CRO ultimate decision making authority with respect to the operation and management of the Debtor.

Click here to see the above filing: Application to Employ Chief Restructuring Officer

Since that time, the bankruptcy schedules and reports have been signed by Mr. Gerrard, including the Grain Report of November 17 which disclosed an additional $9 million in unpaid debt to farmers for their grain, putting the latest total at around $41 million owed to farmers. See our reporting here: Express Grain bankruptcy filings show more than $115 million in debts

At the November 17th hearing, the Court was forced to continue the hearing because John Coleman did not appear in order to be questioned by the parties. Judge Selene Maddox put it this way:

The Court held a telephonic hearing on November 17, 2021, during which the Chief Executive Officer of Express Grain, John Coleman, did not appear telephonically to testify after being called as a witness. Further representations to the Court revealed that John Coleman signed and caused to be filed on behalf of the Debtor the initial petition, schedules, and other documents under the extension granted by the Court. The Court has thus determined that it is in the best interests of the parties, including the Debtor, Creditors, and the bankruptcy estate to continue these matters to a later date so that the Court may conduct a live, in-person hearing. The Court believes that any party wishing to call John Coleman as a witness, or compel the attendance of any other witness, should be given the opportunity to compel his/her presence by any method allowable under the Federal Rules of Bankruptcy Procedure and the Bankruptcy Code.

Click here to read the Judge's full order: Order continuing hearing

Therefore, on November 18, 2021, the "Farm Group" of 34 farmers who are owed money by Express Grain for their grain did subpoena John Coleman to appear at the November 30 in-person court hearing in Aberdeen to provide testimony in the matter.

But in the witness list published after the November 30 Aberdeen hearing, Mr. Coleman's name does not appear. It is unknown whether he appeared and was not called, or whether he was excused. See the witness and exhibit list here: Witness and Exhibits for November 30th hearing

Additionally, at the Meeting of Creditors held on November 23, John Coleman and Michael Colemen, the two owners of Express Grain, are not listed in the trustee's minutes as having attended the meeting at all. Instead, Mr. Gerrard and other officials attended and were questioned by the creditors. See Minutes of November 23rd Meeting with Creditors

According to the schedule of payment rates, Mr. Gerrard bills at $775 per hour, with a $25,000 per week cap. Another CR3 partner will bill at $725-$850 per hour. Todd Bearup will bill at $575 per hour with a $16,000 per week cap, and various other personnel will bill out at between $350 to $675 per hour with no caps.

All of these named personnel from CR3 are mentioned numerous times in the itemized invoices and billings described above. The itemization includes numerous airplane trips to and from Greenwood, meals, hotels, and endless meetings during which the billable hours meter was spinning.

John Pittman Hey
The Taxpayers Channel

News Flash Archive

 
Gallery