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BREAKING: Express Grain bankruptcy court sends grain determination to mediation

Tuesday, March 15, 2022, 8:51 pm News Flash Archive

Today, the bankruptcy court in the Express Grain matter sent the question of determining who has interest in the disputed, and partly missing soybeans, to mediation.

Meanwhile, unconfirmed rumors are circulating that UMB Bank is prepared to make a settlement offer to the farmers. These rumors appear to be tied to the mediation efforts that the court has set to start on March 17, but no concrete evidence of such an offer has been made public.

According to the court:

being advised that a number of the parties to this litigation have voluntarily agreed to mediate the disputes presented, finds that mediation of the 11 U.S.C. Section 557 procedures is in the best interest of the estate and creditors.

There is no hint in the court's filings just who these "number of parties" might be.

The court appointed William Houston Brown to serve as mediator. He will be paid by EG $7500 per day plus out-of-pocket expenses.

The court's order may be seen here: Order to Mediation

The so-called "557 Final Determination" hearing that was set to begin March 31, 2022, has been postponed one day to April 1. The court stated that this move is to provide the parties an extra day to prepare for trial in case the mediation process fails to produce a solution.

The 557 procedure is established by the bankruptcy code to sort out competing claims of interest or ownership in grain when they are entangled in a bankruptcy proceeding.

When Express Grain declared bankruptcy, it did not have sufficient soybean inventory to actually cover all the "warehouse receipts" that the financing firms used to claim ownership of the soybeans.

In other words, EG sold beans that did not actually exist.

The fraud is so huge, that EG's apparent liquidated value, around $85 million, covers barely half of its debts, around $165 million.

Farmers took their grain to the EG warehouses but were never paid to the tune of at least $41 million.

UMB Bank is owed $70 million that it loaned EG. StoneX and Macquarie bought around $45 million of soybeans, some of which did not actually exist.

Meanwhile, the "production lenders" who financed the farmers haven't been paid, because their farmers haven't been paid.

And there are tens of millions of dollars in other debt to vendors and financing companies.

To read more about just how mixed up the whole case is, please read here: Express Grain bankruptcy produces hundreds of objections to claims on the missing soybeans

The court hopes that mediation can sort out some of these disagreements and conflicts before the April 1st "Final Determination" hearing.

 


To read all our coverage of the Express Grain bankruptcy case, see here: Index of Express Grain articles

 

John Pittman Hey
The Taxpayers Channel

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