Friday, November 19, 2021, 1:00 pm
News Flash Archive
As reported Friday by the Greenwood Commonwealth, recent filings by Express Grain (EG) in the bankruptcy proceedings list almost $41 million in payments owed to farmers for grain delivered to the warehouse facilities that has not yet been paid for.
But that is not even half of the full amount that EG owes. The various schedules and information filed on November 5 paint a darker picture of the financial distress of the company, which employs almost 200 people.
The financial crisis is so desperate that the retainer check for $33,000 by Express Grain to pay its own bankruptcy attorney Craig M. Geno, bounced.
The bankruptcy case already has over 1100 docket entries, with hundreds of interested parties, along with their lawyers, and a multitude of desperate demands for payment.
The amount owed to farmers was originally listed as $31,353,120, but the new "Grain Report" filed November 17 puts that figure at $40,752,800.42, an increase of $9,399,680.42.
The original total amount reported owed by EG was $105,953,622.63, but adding in the additional $9 million owed to farmers, the total debt appears to exceed $115 million.
Greenwood based Express Grain Terminal experienced explosive growth during the past three years.
In 2019, gross revenue was $95 million. In 2020, it ballooned to $130 million. For the first nine months of 2021, it rocketed to $249 million.
In order to expand capacity and production capabilities, EG borrowed $35 million from UMB Bank in Kansas City. In addition, smaller amounts of financing were obtained from various equipment sellers.
But this explosive growth appears to have left Express Grain with a liquidity problem: the farmers' produce was coming in such large quantities, that the company did not have the funds to pay for it, while it either processed the material, or found purchasers to sell it to.
In anticipation of this problem, EG borrowed more money from UMB Bank, called a "Revolving Note." The maximum amount agreed to was an additional $40 million, but the actual amount permitted at a given time depended in part upon how much produce EG actually owned.
As first reported in the Jackson Jambalaya blog, (see article here: Lawsuit: Express Grain Shucked Bank out of $71 Million) UMB Bank called all its notes on September 24, 2021, and filed suit in Leflore County Chancery Court on September 28, 2021. In its lawsuit, UMB Bank claimed that EG had not met various obligations such as timely reporting of its financial situation and providing accurate produce inventories.
At that time, according to UMB Bank, EG owed the bank $70,703,260.30 including principal and interest.
UMB Bank claimed that EG had sold 3.3 million bushels of soybeans worth almost $43 million to other financing companies (the "Repo Lenders"). According to UMB's lawsuit, EG "falsely represented that the commodities sold to the Repo Lenders were still owned by" EG.
However, the UMB Bank lawsuit does not provide sufficient information to show that EG actually sold its commodities that were pledged to the bank. It appears possible that at least part of the $43 million of soybeans sold to other lenders was from the huge influx of soybeans received by EG during the month of September.
Part of the confusion comes from the fact that EG stores grain that it has already sold to others, and many of the filings in the bankruptcy do not make clear whether the inventory figures refer only to grain owned by EG, or to grain sold by EG to others but still held by EG at its warehouses.
UMB Bank's Chancery Court suit requested that the Court appoint a receiver to sell off inventory, collateral, and other assets of EG sufficient to pay the $70 million notes owed to the bank.
The next day, September 29, 2021, EG filed for bankruptcy protection in the federal bankruptcy court. At that point, EG became immune from suit in other courts, and UMB Bank dropped its Chancery Court lawsuit.
According to EG's later November 5th bankruptcy filings, it held assets of $101,253,568.11 as of September 29, 2021.
These included $17,600,000.00 in real property (land and buildings), $59,343,312.00 in commodities (mostly soybeans and corn), and $5,167,730.29 in accounts receivable (money owed to Express Grain by others).
According to its filings, EG was overdrawn across its several checking accounts by $3,889,164.25.
In addition to owing the various banks and financing companies around $70 million, and the farmers $41 million, EG also owed non-farmer vendors $4,970,280.87, according to their November 5th filings.
Some of these additional creditors are from Leflore County and the surrounding area. Others are owed large amounts of money.
|$11,750.00||CN (Canadian National)|
|$42,623.82||Delta Electric Power |
|$18,109.48||Delta Farm Auto|
|$1,985.00||Fast Pace Urgent Care |
|$108,905.88||Greenwood Utilities |
|$246,438.59||Gresham McPherson Oil Co |
|$1,231.20||Hampton Inn |
|$29,000.00||Horne CPA |
|$837.85||Janitor's Supply & Paper Company, Inc.|
|$43,960.00||Jones Electrical Supply|
|$2,070.50||Lawrence Printing |
|$8,665.00||Leflore Steel of Greenwood, LLC |
|$880,773.83||Louis Dreyfus Company Claypool Holding|
|$2,350.00||Mark Miller |
|$104,026.82||MS Department of Agriculture & Commerce |
|$8,947.90||P.T. Staples Contracting|
|$7,764.00||Pernell Repairs, Inc.|
|$62,984.42||Phillips 66 Company |
|$13,662.90||Scott Petroleum |
|$65,474.49||Southern Industrial Supply |
|$3,507.48||Southern Tire Mart, LLC |
|$22,701.00||Stephen A Brandon |
|$5,303.33||Stribling Equipment, LLC |
Here are just a few of the bankruptcy filings in this matter:
2021-09-29 - Bankruptcy Petition
2021-11-15 - Statement of Financial Affairs
2021-11-15 - Statement of Financial Affairs - exhibits
2021-11-15 - Declaration
2021-11-15 - Lists of Creditors
2021-11-17 - 557 Report
2021-11-17 - Grain Report
John Pittman Hey
The Taxpayers Channel
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