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Details of Express Grain bankruptcy auction finally revealed in final sales order by the court

Monday, April 11, 2022, 6:28 pm News Flash Archive

Today, the bankruptcy court finally docketed its order selling almost all of the physical assets of Express Grain to UMB Bank as the highest bidder, at $25 million.

The order discloses some interesting aspects that were previously unknown to the public. The court's order may be seen here: Order approving sale of Express Grain assets to UMB Bank

The sale of EG assets took place at an auction held the morning of February 25, 2022. The winning bid by UMB Bank was approved by the court that afternoon, but it took until today before the order was finally reduced to writing and posted. The Taxpayers Channel first reported that UMB Bank had won the bid here: UMB Bank high bidder at Express Grain auction

According to today's Sale Order, the following qualified bids were received before the auction took place:

a. Bank of the West (BOTW);
b. Frank S. Brumfield (Mr. Brumfield);
c. Caterpillar Financial Services Corporation (Cat Financial);
d. Farmers Grain Terminal, LLC (Farmers Grain);
e. PPL Acquisition Group, LLC (PPL);
f. Roebuck Landing Grain Terminal, LLC (Roebuck);
g. Tackett Fish Farms (Tackett);
h. The Andersons, Inc. (The Andersons);
i. Thoroughbred AgriFuel Holdings, LLC (Thoroughbred);
j. Tiger Capital Group, LLC and Perry Videx, LLC (collectively, Tiger Group); and
k. UMB Bank, N.A.

UMB Bank's bid was a "creditor bid," which means that except for taxes, closing costs, and a reserve for surcharge rights, UMB Bank was offsetting the amount of money EG owes the bank in lieu of cash. Thus, UMB Bank's bid, if accepted, would reduce the amount owed UMB by the amount of the bid.

The court provided a blow by blow description of how the bidding proceeded:

On the bid deadline established for credit bids, UMB Bank, N.A. ("UMB" or "Buyer") made an initial credit bid of $18,000,000 for the fixed assets that constituted its collateral located in Minter City, Mississippi, Sidon, Mississippi, and Greenwood, Mississippi, as further detailed in its credit bid (the "UMB Credit Bid").

The CRO, on behalf of the Debtor, conducted the auction of the sale of the assets on Friday, February 25, 2022, at 10:00 a.m., at the United States Bankruptcy Court, Northern District of Mississippi, Cochran U.S. Bankruptcy Courthouse, 703 Highway 145 North, Aberdeen, MS 39730 (the "Auction"). The CRO offered, initially, all of the Debtor's assets for sale. The UMB Credit Bid of $18,000,000 was announced as the bid to "open" the bidding. Other than the UMB Credit Bid, there were no other bids at that time for the assets upon which UMB held liens and security interests.

The CRO then offered the Debtor's assets for sale by location - Minter City, Mississippi, Sidon, Mississippi, and Greenwood, Mississippi. The CRO received the following bids for parts of the Debtor's assets: None were received for the Minter City property and Farmers Grain submitted a Qualified Bid of $14,800,000 for the Sidon property. Several parties, including Tiger Group, PPL, Thoroughbred and Mr. Brumfield actively participated in the Auction and all increased the terms of their bids for the Greenwood property. Tiger Group opened the bidding on the Greenwood property with its bid of $2,100,000 for the equipment and fixtures only. At the end of the bidding, the highest bid received for the Greenwood property was submitted by Thoroughbred for $3,050,000.

After offering the Debtor's assets for sale by location, the CRO opened the floor for offers for any combination of the Debtor's properties. Mr. Brumfield submitted a Qualified Bid for the Minter City and Sidon properties but at the Auction, he increased his bid from $6,000,000 to $14,950,000 for those two properties. Farmers Grain countered with a $15,000,000 bid. No other bids were received for the Minter City/Sidon combination and no other combinations were submitted by any other parties.

The CRO then circled back and, again, offered all of the Debtor's assets for sale. UMB increased its credit bid to $20,000,000 which was countered by a joint bid submitted by Mr. Brumfield, offering $16,000,000 for Sidon and Minter City, and Thoroughbred, offering $4,000,000 for Greenwood. UMB increased its credit bid again to $20,500,000. A joint bid was then put forward by Mr. Brumfield, offering $16,250,000 for Sidon and Minter City, and Thoroughbred, offering $4,250,000.

UMB increased the UMB Credit Bid to $25,000,000. After UMB's last bid, Mr. Brumfield and Thoroughbred declined to bid further, whereupon the CRO and Craig M. Geno, Esq., Debtor's counsel, after consultation (as required by the Bid Procedures Order) with a number of stakeholders, concluded that the UMB Credit Bid for the assets was the highest and best bid for the assets. The assets identified in the UMB Credit Bid are referred to herein as the "Purchased Assets".

According to the court, UMB Bank will also have to pay $605,121.46 (the "Cash Component") detailed as follows:

a. $143,121.46 in real estate and ad valorem taxes;
b. $62,000 in closing costs;
c. $0.00 in senior liens; and
d. $400,000.00 to resolve Debtors' surcharge rights

"Surcharge rights" are a way to make the secured creditor (UMB Bank) pay its share of the "reasonable, necessary costs and expenses of preserving, or disposing of, such property."

According to the court's order today, EG will immediately transfer the property to UMB Bank, free and clear of all liens or liabilities.

Excluded from UMB Bank's purchase of substantially all of EG's property are several items, including:

accounts receivable;
insurance policy proceeds;
inventory of corn, soybeans, soybean oil, soybean meal, soybean pellats, and soybean hulls;
cash, cash equivalents, bank accounts and commodity accounts;
the following equipment: Articulated Boom Lift w/ attachments, accessories, etc., 2019 Dodge Ram 3012, CAT Telehandler TL 1055, CAT 926 Wheel Loader, 2019 Chevrolet 5644, and 2015 Tadano Crane.

All of the above excluded items are retained by EG, except for the equipment, most of which has already been sold or abandoned and repossessed by the companies that financed the purchase of the items.

The cash, and any remaining inventory will be used to pay off remaining creditors.

 


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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