Monday, March 20, 2023, 6:54 pm
News Flash Archive
This morning, the federal court in Western Missouri filed an order dismissing the lawsuit by UMB Bank against Dr. Michael Coleman for $39 million in the Express Grain debacle.
The court indicated that the parties have settled the matter. No terms of settlement were disclosed, or are ever likely to be disclosed.
According to the court:
ORDER OF DISMISSAL
Having been notified of the settlement in this case and it appearing that no issue remains for the Court's determination with respect to these claims, it is hereby
ORDERED that this case is DISMISSED without prejudice. In the event that the settlement is not perfected, any party may move to reopen the case, provided that such motion is filed within 45 days of the date of this Order. In addition, the Court retains jurisdiction over enforcement of the settlement agreed to by the parties.
IT IS SO ORDERED.
The court's order of dismissal may be seen here: Order Dismissing Case because of Settlement
UMB Bank had sued Dr. Coleman after EG defaulted on $70+ million in loans from the bank. This was triggered by UMB Bank's discovery that EG had provided the bank forged audit reports going back several years, which concealed the true dismal financial picture for the grain company. In addition, EG provided UMB Bank with fictitious grain inventory figures, vastly overstating UMB Bank's grain collateral. UMB Bank discovered that EG was selling fictitious beans to other finance companies and lying about it to the bank.
In the end, EG filed for bankruptcy, owing creditors $210 million, but having a liquidated value of only somewhere around $85 million. Farmers who were not paid for their grain were cheated out of some $48 million.
Dr. Michael Coleman owned 99% of EG, but there has been no allegation of any personal misconduct on his part.
His son, EG president John Coleman, declared personal bankruptcy, and was recently indicted and arrested on multiple counts of fraud by state and federal authorities. John Coleman has pleaded not guilty to all charges.
UMB Bank managed to recover just under $35 million of its loans, leaving the guarantors, John Coleman and Dr. Michael Coleman, owing the rest. John Coleman is bankrupt and cannot be sued under federal law.
Before it was over, UMB Bank filed an amended complaint in early January 2023, claiming that Dr. Coleman owed it $39.0 million in unpaid loans and accumulated interest. See UMB Bank's most recent complaint here: UMB Bank Amended Complaint against Dr. Michael Coleman
Dr. Coleman, for his part, denied owing the bank that sum of money, and claimed that he had not approved, or perhaps even signed, the guaranty that UMB Bank had on file. To read Dr. Coleman's latest response, see here: Dr. Michael Coleman's Answer to UMB Bank's Amended Complaint
Added to this was the fact that the federal court sent the matter to mediation. No mediation outcome report was ever filed on the public record. See the appointment of the mediator here: Certificate of Mediator Appointment
For a more in-depth review of the issues in this Breach of Guaranty lawsuit, see our previous reporting here: Dr. Michael Coleman denies he owes what UMB Bank claims in Express Grain collapse
The trial had been set in Kansas City, Missouri for July 22, 2024.
Meanwhile, both of the new farmers' lawsuits in Tallahatchie and Holmes Counties, which were removed to federal court by UMB Bank and Horne LLP, have been stayed pending resolution of their motions to send both cases to the bankruptcy court that is already handling the EG bankruptcy case.
The argument is that the cases involve facts and orders that are under the jurisdiction of the federal bankruptcy court, and therefore ought to be handled by the same bankruptcy judge.
In John Coleman's personal bankruptcy case, the new Chapter 7 bankruptcy trustee, Mr. William Fava, has asked that the creditors be given notice to provide proof of their claims, and that the case be kept open, because he has found assets which should be distributed to the creditors.
Most likely, those assets were already known, and are the liquidated value of various real properties that Mr. Coleman's Chapter 11 bankruptcy estate has sold with court approval.
To see the trustee's request, click here: Trustee's Notice of Change of Status
And here: Trustee's Objection to Case Dismissal
To read our previous coverage of how John Coleman's case ended up in Chapter 7, see here: Court orders Express Grain president John Coleman's personal bankruptcy into Chapter 7
To read all our coverage of the Express Grain bankruptcy case, see here: Index of Express Grain articles
John Pittman Hey
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