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Express Grain employees told today they may be laid off, and the company shut down

Monday, January 10, 2022, 7:41 pm News Flash Archive

At a "town hall" meeting today, Express Grain employees were notified in writing that the company may soon be shutting down, and they may be permanently laid off starting January 28th.

The notices were hand delivered to the employees by CR3 officials, the company that was brought in to manage EG during the bankruptcy. The letters, which have been seen by The Taxpayers Channel, were signed by CR3's Dennis Gerrard, who is the Chief Restructuring Officer hired by EG and approved by the court.

The notices are required under the "Worker Adjustment and Retraining Notification Act" (or "WARN"). This federal law is meant to provide workers notice before they are suddenly let go from their employment, so that they can obtain employment elsewhere if possible.

The letter reads, in part:

We must advise you that you may be laid off and it is anticipated that the layoff may be permanent.

The possible/expected date of the first separation is January 28, 2022, and the last separation is February 28, 2022. You should anticipate that your separation date is January 28.

The letter specifically references the company's "inability to consummate a debtor-in-possession financing transaction...."

The plan to borrow an additional $30 million to keep EG afloat was reported here: Express Grain wants to borrow another $30 million.

UMB Bank has been pushing hard, along with EG, to gain bankruptcy court approval for the loan, on the basis that the company is worth more when it's up and running, than were it to shut down. However, a host of creditors and farm lenders have strongly opposed the loan, and it has been put on hold.

The letter goes on:

...without the ... financing being approved and granted, Express Grain is unable to obtain and acquire additional soybeans to utilize in its manufacturing operation under which soybeans are crushed to yield soybean meal and soybean oil. Given this dramatic and unforeseeable situation, the company has made the decision to discontinue production, subject to further developments in this case such as the granting of the debtor-in-possession financing and/or other alternatives that will allow the company to maintain manufacturing and crushing operations.

The letter concludes that the company regrets this decision, and that it means the "layoff of loyal, dedicated and highly regarded employees."

It is with heartfelt sympathies and sadness that this action is necessitated, but economic circumstances mandate it.

Up to this point, the bankruptcy court has bent over backwards to accommodate EG's wishes to remain operational, and so much stress has been placed on the importance of it doing so, that it is unclear what reaction the court might have to this latest turn of events.

John Pittman Hey
The Taxpayers Channel

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