Archive for September, 2010

Farmers affected by the Verasun bankruptcy in the Southeastern Minnesota area might be interested to know about an upcoming meeting being held in Charles City, Iowa.   The Charles City Press reports that all interested parties are invited to a 3 pm meeting at the Charles City Library on Thursday, September 16.

My office is encouraging all farmers affected to get their replies sent in by September 30 to avoid missing the deadline set by the bankruptcy trustees.  There is a chance that all parties will be sued, but those who fail to reply to the demand letters face even great risk.

DTN/The Progressive Farmer posted a good article outlining the background of the Verasun Bankruptcy case.  Farmers are just now receiving demand letters, even though the ethanol plants were sold off a long time ago.  The physical assets were sold off to pay creditors, and now the bankruptcy trustee is going after farmers who received payments in the 90 days before the bankruptcy was filed.

The letters are threatening, and the threat is very real.  Affected farmers need to avoid signing anything, realize that you do have defenses and negotiation options, and contact a lawyer who can help you craft a defense before the September 30 deadline stated in the letter.

For the background article, see the DTN/Progressive Farmer article here.

For Minnesota farmers who would like to discuss representation and your options, please contact attorney Shawn Vogt Sween via email or phone at 507-754-4555.

Farm message boards are buzzing about the letters many farmers recently received stemming Verasun’s bankruptcy proceeding. In most cases, these farmers delivered corn to a Verasun plant as part of their normal operations and received a corresponding payment. Since those final payments came in the 90 days before Verasun declared bankruptcy, the letters claim that the farmers must return the payments, settle for a smaller amount, or face a lawsuit. There are reports of farmers who delivered their entire year’s crop to Verasun or who have since retired, now being asked for all of the money back. In many cases, the farm itself could be driven out of business if it complied with the demand.

So if you’re affected, what can you do? The answer is not as cut and dried as the letters make it sound. You do have options besides returning the money or settling and returning a portion of the money. Most likely, the letters were written to scare people into giving up without a fight.

There are several defenses to the claim that you must return the money. The main defense, which will require analysis of the facts of your specific case, is that you received the payment in “the ordinary course of business.” There are other possible defenses, within the context of agricultural law and preference law, that could apply in other circumstances.

If you received a Verasun letter, make sure you don’t ignore it. You truly could face a lawsuit. Instead, you’ll need to respond quickly and intelligently. Because of the technical nature of the preference law area, please do some research or hire a lawyer who can help you.  In Minnesota, farmers can contact this Mower County farm lawyer for further information.