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Express Grain asks bankruptcy court for permission to spend even more collateral cash through June 3rd

Thursday, May 5, 2022, 8:40 pm News Flash Archive

Bankrupt Express Grain has again petitioned the court to allow it to continue to spend cash collateral to "wind down" the company and complete the transfer of the physical assets to UMB Bank, which placed the high bid of $25 million at the auction held on February 25.

The EG petition may be seen here: Petition to Spend Post-Sale Cash Collateral through June 3rd

This new request does not provide for any further deposits into the escrow accounts of revenue from pre-petition grain, which accounts were to secure the collateral interests of the creditors, including the farmers, the production lenders, and the warehouse receipt holders. There is no provision in the attached budget for "setting aside" the proceeds from inventory sales in separate accounts earmarked for the payment of creditors who have an interest in the grain inventory and its proceeds.

According to the attached budget for the weeks beginning April 30th and ending June 3rd, EG expects to receive payments of $734,538 from customers. No more sales are projected, meaning that substantially all of EG's inventory has already been sold.

The projected total income is $1,164,506. Again, none of that income is being transferred to the various escrow accounts that were growing under previous orders.

Additionally, expenses budgeted during the same period include:

$152,056 for salaried payroll
$27,000 for electricity
$150,000 for insurance (property and casualty)
$250,000 for the bankruptcy trustee fees
$759,599 for chapter 11 professional fees

The figures on the budget sheet do not add up correctly, suggesting that the amounts budgeted for chapter 11 professional fees are not correctly calculated, and the bankruptcy trustee fees were not included in the cash flow figures for any of the five weeks. Those bankruptcy professional fees are for payment of the CRO and CR3 staff, and the bankruptcy attorneys.

Both UMB Bank and the Production Lenders (Bank of Commerce and others) have lodged replies in which they ask the court to include the protections that all previous orders have had regarding the collateral interests in the grain for the creditors.

Meanwhile, in John Coleman's personal bankruptcy case, it appears that Mississippi Reproductive Medicine wants to settle Express Grain's claim against it. Craig Geno filed a motion asking the court to settle the claim: Motion to Settle Claim against Mississippi Reproductive Medicine

EG had sued Mississippi Reproductive Medicine and a New Jersey pharmacy for fertility treatments that John Coleman charged on EG's credit card just before it declared bankruptcy. See our previous reporting here: Express Grain sues to claw back credit card charges made by its president John Coleman

EG sued Mississippi Reproductive Medicine for $12,250 in "alleged constructive fraudulent conveyances" by John Coleman to the unsuspecting fertility treatment center. MRM seeks to return the $12,250 to EG, and EG is willing to settle the claim for that amount, with the court's approval, and waive any interest and court costs.

 


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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