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Express Grain bankruptcy creditors await court ruling on the proposed settlement agreement

Tuesday, April 26, 2022, 7:50 pm News Flash Archive

On April 25, the bankruptcy court in the Express Grain collapse held a hearing about whether to approve the proposed settlement agreement regarding competing rights for the grain and its proceeds.

The court took the matter under advisement to allow the farmers to file a sur-reply to UMB Bank's reply filed early on the morning of the hearing.

But it appears that a majority of the farmers are having "buyers remorse" about the settlement, fearing it will undercut their lawsuit against UMB Bank filed by attorney Don Barrett. See our previous reporting here: Confusion and danger in the run-up to Monday's hearing on the Express Grain settlement

Over half the farmers who were never paid for the grain they delivered to EG have joined the "disclaiming farmers" group, meaning they have decided to waive their rights to the 557 grain proceeding and to the grain proceeds money, but instead will pursue damages from UMB Bank with Don Barrett's class action lawsuit.

These farmers are now in dispute with UMB Bank and the other Warehouse Receipt Holders (WHR Group - UMB Bank, Macquarie, and StoneX) as to the effect their "disclaimer" will have on their suit against UMB Bank. This was a major point of contention at Monday's hearing.

UMB Bank's early morning filing may be seen here: UMB Bank Reply to Farmers Objection to the Settlement Agreement

The WHR Group makes their position plain:

While the Disclaiming Farmers state they only want neutrality and not advantage, in reality what they want are the benefits of both Options 2 and 3 [both of which reject the settlement] without the corresponding detriments that come with either. Indeed, they want to enhance their current circumstances, which apparently includes evading this Court's exclusive jurisdiction and continuing to pursue UMB (and likely others) over the Disputed Grain Asset Pool just in a different forum. As discussed herein, the objections raised by the Disclaiming Farmers are without merit, demonstrate unacceptable gamesmanship, and should be overruled.

The WHR Group further alleges:

The Disclaiming Farmers want to alter the law as to who must bear the impact of a waiver and disclaimer. They propose that they, who actually gave the disclaimer and unequivocally waived their interests in the Disputed Grain Asset Pool, should not have to face any legal implications from their disclaimer. Rather, the parties who did not give any disclaimer (i.e., WHR Group) should have to waive or limit certain rights and defenses that have always been available to them and should remain available in future (or current) litigation. Further, as laid bare in their objection, such proposal is in furtherance of the Disclaiming Farmers attempt to make an end-run around this Court and its jurisdiction over the Disputed Grain Asset Pool and make claim to such assets before another court.... The Disclaiming Farmers interference and attempt to avoid this Court's jurisdiction should not be permitted.

Regarding the demand by the Disclaiming Farmers that the court add language to preserve their claims against UMB Bank, the WHR Group states:

... the act of waiving and disclaiming interest in specific property is an act that has legal significance and consequence. The Disclaiming Farmers are essentially asking the Court to preemptively and inappropriately curtail the legal significance of their waiver and disclaimer in order to preserve their tort claims to be heard in another jurisdiction. In other words, they are asking this Court to issue an advisory opinion as to the validity of the waiver and disclaimer in response to a defense not yet raised in litigation pending before another court.

The WHR Group never agreed to waive any of their defenses in the Barrett lawsuit against UMB Bank, and argue:

Thus, no party can in good faith claim confusion, misunderstanding, mistake, or surprise that the WHR Group was reserving all defenses. While it is apparent that certain parties may now regret their decision in signing the waiver and any legal implication it may have in other litigation, such remorse does not give rise to their ability [to] withdraw such waiver. Further, it does not justify limiting any defenses available to other parties based on such an election, nor does it support rejecting the Settlement Agreement that benefits other farmers.

The WHR Group asks the court to approve the settlement agreement and order without adding any language as asked for by the Farm Groups.

The court set a deadline of midnight April 27 for the Farmers' attorneys to file their sur-reply, and set a deadline of April 29 for the court's ruling to be issued.

Meanwhile, Mr. Don Barrett's firm has filed a notice of subpoena in his class action lawsuit against UMB Bank, in which the farmers ask for voluminous records from Express Grain. See a copy of the subpoena here: Farmers Subpoena of Express Grain records regarding UMB Bank

The records must be brought by EG to a deposition, which has yet to be scheduled. The description of the records demanded by Barrett is:

Information and communications related to Express Grain Terminals, LLC's business operations and/or financial condition - including, but not limited to, any dealings or communications with UMB Bank, N.A. for the dates of January 1, 2015 to the present, including but not limited to, documents and data produced in In re Express Grain Terminals, No. 21-11832-SDM (Bankr. N.D. Miss.)

 


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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