Wednesday, July 6, 2022, 5:30 pm
News Flash Archive
While the Express Grain bankruptcy saga appears to be reaching a conclusion, some of the farmers have continued to pursue UMB Bank. Now more subpoenas have been issued by their attorney, Don Barrett of Lexington.
Barrett filed suit in federal court against UMB Bank, EG's largest creditor. EG owes UMB Bank $71 million in loans. UMB Bank called the loans a week before EG filed for bankruptcy protection.
But Barrett claims that UMB Bank was actually in cahoots with EG, plotting to shanghai the inventory that EG held on September 29, 2021. Most of that inventory had not been paid for. See our extensive reporting on Barrett's claims here: Farmers double down in class action suit against UMB Bank in Express Grain failure
Barrett's lawsuit is in the early discovery phase, as the parties are awaiting a ruling from US District Court Judge Henry Wingate on UMB Bank's motion to dismiss based on legal arguments only. UMB Bank has not as yet answered the factual allegations laid against it by Barrett's suit.
But as of July 1st, both sides have exchanged discovery requests.
Barrett has also subpoenaed documents and records from non-parties to the lawsuit, and those subpoenas reveal interesting insights into Barrett's strategies, and what sort of information he is seeking to prove his claims against UMB Bank.
On June 2nd, Barrett subpoenaed Blake Magee, who at one time was the Controller at EG, but since June 2020 has been CFO at Greenwood Utilities. On the subpoena, Barrett misspelled Magee's last name as "McGee." Barrett wants the following from Mr. Magee:
All materials that reference Express Grain Terminals, Inc. ("EGT"), its affiliates, subsidiaries, or its principals John Coleman and Michael Coleman, including, but not limited to:
a. all communications with EGT and/or its representatives from January 1, 2013 to the present;
b. all records reflecting the establishment, maintenance, or access of EGT to eGrain systems or accounts.
c. all communications with UMB Bank, NA, StoneX Commodity Solutions, f/k/a
Stone Merchant Services LLC, Macquarie Commodities (USA) Inc., or Macquarie
Bank Limited, and/or their representatives regarding EGT from January 1, 2013 to
the present;
d. the issuance, transfer and cancellation of electronic warehouse receipts ("EWRs") or Price Later/Credit Sales contracts from or to EGT from 2013 to the present; and
e. all records reflecting any and all persons or entities that had access to EGT account information from January 1, 2013 to the present.
Then on June 6th, Barrett subpoenaed yet more documents from Express Grain. The new record demands were:
1. All information, documents and communications related to Express Grain Terminals, LLC's ("EGT") business operations and financial condition -- including, but not limited to, any dealings or communications with UMB Bank, N.A. and Horne LLP from January 1, 2015 to the present, including, but not limited to, documents and data produced in In re Express Grain Terminals, LLC; No. 21-11832-SDM (Bankr. N.D. Miss.).
2. All records reflecting the establishment, maintenance and/or access of EGT to the eGrain system.
3. All communications and documents with StoneX Commodity Solutions f/k/a Stone Merchant Services LLC, Macquaire Commodities (USA), Inc., or Macquarie Bank Limited, and/or their representatives regarding EGT from January 1, 2015 to present.
4. All documents and communications regarding the issuance, transfer and cancellation of electronic warehouse receipts ("EWRs") or Price Later/Credit Sales contracts from or to EGT from 2013 to the present.
5. All records and communications reflecting any and all persons or entities that had access to EGT account information from January 1, 2015 to present.
6. All documents and information related to and contained in EGT's and its affiliates' "Grainsoft" system from December 31, 2014 to the present. If Grainsoft is the incorrect spelling of EGT's proprietary software, this request shall encompass the correct spelling whether herein described or not.
Indeed, John Coleman created and programmed the GrainSoft program to help manage EG's grain operations. EG also used QuickBooks, as well as several other software packages which are listed in the bankruptcy petitions.
Then on June 22nd, Barrett subpoenaed NBH Bank of Colorado, demanding the following records:
1. The employee folder for Mark Reinert;
2. All information, documents and communications related to Express Grain Terminals, LLC's ("EGT") or John Coleman.
It is unknown to the public just what NBH Bank has to do with Express Grain, but since April 2021, Mark Reinert has been NBH's Director of Food and Agribusiness.
From August 2014 to April 2021, Mr. Reinert was Senior Vice President for Food and Agribusiness at UMB Bank. In fact, Mr. Reinert was the UMB Bank officer who signed the key loans, revolving notes, and other documents that financed EG to the tune of $71 million.
And indeed, also on June 22nd, Barrett subpoenaed records from Mark Reinert directly:
All information, documents and communications related to Express Grain Terminals, LLC's ("EGT") and/or John Coleman in your custody or control.
Also on June 22nd, Barrett subpoenaed records from FORVIS, LLP, an accounting, tax law, and consulting company with an office in Jackson, Mississippi. From them, Barrett wants:
1. All information, documents and communications related to Express Grain Terminals, LLC's ("EGT") and/or John Coleman in your custody or control;
2. All information, documents and communications with
UMB Bank or its employees/representatives regarding EGT or John Coleman.
Next, on June 27th, Barrett subpoenaed records from both StoneX and Macquarie:
Information and communications with, or related to, Express Grain Terminals, LLC, and/or any of its affiliates, and 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.).
Finally, on June 27th, Barrett subpoenaed records from Agribusiness Consulting Group, LLC:
Information and communications with, or related to, Express Grain Terminals, LLC, and/or any of its affiliates, and 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.).
The business relationship of Agribusiness Consulting Group to either EG or UMB Bank is unknown, but it appears that the company offers services to provide to lenders an assessment of the stability and credit worthiness of farm companies. According to its website, it provides "collateral examination services" to lenders:
ACG is a professional services firm specializing in providing collateral exams that focus on industry specific risk areas, assessment of those risks and specific recommendations that will aid in making well informed decisions with regards to appropriate loan structure and risk management.
ACG conducts pre-loan inspections as well as recurring field examinations to assist lenders in fully understanding the collateral and associated risks for underwriting existing or proposed lines of credit.
Previously, on April 26th, Barrett demanded that EG (who is not, and cannot be sued by Barrett because it is in bankruptcy protection) produce voluminous records:
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.)
On May 9th, Barrett subpoenaed records from EG's auditing firm, Horne LLP. Horne's official audits were doctored by EG before they were submitted to various parties, including the Mississippi Department of Agriculture and Commerce, as well as to UMB Bank and the Mississippi Development Authority.
Barrett seeks the following from Horne:
Information and communications with, or related to, Express Grain Terminals, LLC, and/or any of its affiliates, subsidiaries, and principals, John Coleman and Michael Coleman, and 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..., audit workpapers, communications with John Coleman and Michael Coleman, and all invoices and billing records related to said parties.
On May 10th, Barrett subpoenaed records from eGRAIN, the national electronic clearing house for warehouse receipts. Specifically, Barrett wants:
All materials that reference Express Grain Terminals, Inc. ("EGT"), its affiliates, subsidiaries, or its principals John Coleman and Michael Coleman, including, but not limited to:
a. all communications with EGT and/or its representatives from January 1, 2013 to the present;
b. all records reflecting the establishment, maintenance, or access of EGT to eGrain systems or accounts.
c. all communications with UMB Bank, NA, StoneX Commodity Solutions, f/k/a Stone Merchant Services LLC, Macquarie Commodities (USA) Inc., or Macquarie Bank Limited, and/or their representatives regarding EGT from January 1, 2013 to the present;
d. the issuance, transfer and cancellation of electronic warehouse receipts ("EWRs") or Price Later/Credit Sales contracts from or to EGT from 2013 to the present; and
e. all records with corresponding metadata reflecting any and all persons or entities that had access to EGT account information from January 1, 2013 to the present.
No doubt Barrett is seeking evidence of when UMB Bank first knew about the forged audits, and first knew about the selling of grain that didn't actually exist to Macquarie and StoneX. To see our original reporting on these older subpoenas, click here: More subpoenas issued in Don Barrett's lawsuit against UMB Bank concerning the Express Grain collapse
In all, 260 farmers were cheated out of around $49 million in grain deliveries that EG never paid them for. Now there is not nearly enough money to pay all the creditors, and the farmers will never receive payment for most of the crops they delivered to EG.
But in the John Coleman personal bankruptcy case, UMB Bank claimed that EG deceived it along with everybody else, and obtained loans to which it was not entitled, by falsifying audit and inventory reports upon which the bank loans were based. UMB Bank gave detailed descriptions of what it claims Mr. Coleman did to fool the bank into loaning EG $71 million in all. See here for UMB Bank's claims: UMB Bank levels new fraud accusations against John Coleman and Express Grain
John Coleman never filed an answer to UMB Bank's claims, and the bankruptcy court awarded UMB Bank a default judgment against Coleman personally for $71 million. It is unlikely that UMB Bank will ever collect a penny from Mr. Coleman.
To read all our coverage of the Express Grain bankruptcy case, see here: Index of Express Grain articles
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