The president of Express Grain Terminals LLC is scheduled to speak on the record next week regarding the company’s ongoing bankruptcy proceedings.
John Coleman is to be deposed by attorneys on Feb. 15, according to a court document filed Friday. His deposition is one of several scheduled in February.
Express Grain filed for bankruptcy in late September and owes more than $156 million, including more than $31 million to farmers and more than $70 million to UMB Bank of Kansas City, Missouri.
Federal Judge Selene Maddox, who presides over the company’s bankruptcy proceedings as well as those for Coleman’s personal bankruptcy, approved the schedule of depositions as part of discovery to establish facts of the case and settle disputes among the parties.
The deposition of Coleman was requested by attorneys representing Bank of Commerce and First South Farm Credit, two production lenders who financed the farmers’ crops. Since the farmers haven’t been paid, the production lenders haven’t either.
Coleman has been accused of fraud by several sources.
As reported by the Clarion Ledger, Attorney General Lynn Fitch’s office is investigating him for allegedly submitting fraudulent financial documents to state regulators, though the office did not provide further detail.
The Department of Agriculture and Commerce has alleged that Express Grain submitted a fraudulent audit document when applying in 2021 for renewal of its grain warehouse licenses for facilities in Greenwood, Sidon and Minter City. Allegedly the version submitted by Express Grain to the department was not the version given to Express Grain by Horne LLP, a Ridgeland-based accounting firm.
Joe Green, the auditor who prepared the report, testified at a Thursday hearing before the Department of Agriculture that the document given to the department was not the one he prepared for Express Grain, according to reporting by the Clarion Ledger.
The department has not yet announced a decision on whether it will revoke or suspend Express Grain’s grain warehouse licenses.
UMB Bank, Express Grain’s largest creditor, has also alleged receiving an altered audit document from Express Grain.
The document, filed with the court last month, shows the company operating with a profit when it actually lost $21 million in the year ending June 30, 2020. Also removed from the document were warnings that Express Grain was not in compliance with the terms of its loans from UMB Bank and that the company was on the brink of failure.
In a complaint filed with the court in early January, the bank alleged Coleman misrepresented the amount of grain owned by Express Grain and used that inflated number to borrow more money from the bank than it could have otherwise.
The bank is holding Coleman and his father, Greenwood ophthalmologist Dr. Michael Coleman, personally responsible for the $70 million owed by Express Grain. It provided to the court a signed guarantor agreement that make the two men liable for Express Grain’s loans should the company default.
Maddox rejected Coleman’s attempt in January to have his personal bankruptcy case dismissed. She said it was in the best interests of creditors and the estate to approve the appointment of an examiner. That examiner, chosen by the United States Trustee, is Albert Antro, a certified public accountant based in Nashville, Tennessee.
Coleman has since filed a request to convert his bankruptcy from a Chapter 11 filing to a Chapter 7.
Though still president of the company, Coleman is no longer managing its day-to-day operations.
That responsibility is now with Dennis Gerrard of CR3 Partners LLC, a turnaround firm hired by Express Grain to help the company go through its bankruptcy restructuring.
- Contact Kevin Edwards at 662-581-7233 or kedwards@gwcommonwealth.com.
