The largest creditor for Express Grain Terminals LLC said in a response filed Wednesday that it “had an arm’s-length, creditor relationship” with the company and denied allegations of fraud and conspiracy made in a class action lawsuit by farmers.
Express Grain filed for bankruptcy in September. UMB Bank of Kansas City, Missouri, which is owed more than $70 million by Express Grain, maintains liens on all of the company’s property. It asserts that included in the collateral for loans was grain delivered to the company and its proceeds.
The bank was sued in November by Island Farms LLC of Holly Springs, Porter Planting Co. Partnership of Greenwood and Wyatt Farms Partnership of Tchula.
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Overall, more than 200 farmers have asserted claims of money owed by Express Grain. The company’s bankruptcy documents show the company owes all farmers more than $31 million.
The farmers allege in their lawsuit, filed with the U.S. District Court of the Southern District of Mississippi, that UMB Bank knew of Express Grain’s declining financial condition but propped it up until the company could fill its warehouses with the fall harvest.
In their amended complaint filed last month, the farmers allege UMB Bank “took advantage of Express Grain’s misrepresentations and omissions concerning its financial stability, and in fact made fraudulent misrepresentations itself, in order to acquire more collateral.”
They are asking the court for compensatory, punitive and exemplary damages.
In the bank’s response, it states, “Plaintiffs’ claims, if any, lie with the Express Grain bankruptcy estate,” and points to the ongoing bankruptcy proceedings, which it says would give the farmers the relief they are seeking.
It denies the farmers’ allegation that there was any conspiratorial relationship and asserts that there have been no facts presented to prove it.
The bank has had its own disputes with Express Grain, alleging that the company, at the direction of its president, John Coleman, inflated its grain inventory as a way to secure bigger loans for which it wouldn’t have qualified otherwise.
In the conclusion of its response, the bank states, “Plaintiffs dealt with Express Grain; they delivered grain to Express Grain and expected payment from Express Grain,” and says the farmers should solve their problems by dealing with Express Grain.
UMB Bank has asked the court to dismiss the lawsuit with prejudice, meaning it could not be refiled later.
- Contact Kevin Edwards at 662-581-7233 or kedwards@gwcommonwealth.com.
