Express Grain Terminals’ largest creditor has filed a complaint against the company’s president, John Coleman, alleging he committed fraud when applying for loans, according to documents filed in bankruptcy court Monday.
Coleman “knew the financial information being provided to UMB was false,” alleges UMB Bank of Kansas City, Missouri, in its filing.
Both Coleman and Express Grain filed for Chapter 11 bankruptcy in late September. The farming company owes more than $156 million, including
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$70 million to UMB Bank.
The bank is alleging fraud, materially false financial statements and willful and malicious injury.
It is asking the court to exempt Coleman from any discharge of debt owed to the bank. UMB Bank noted that according to a guaranty agreement that both John Coleman and his father, Dr. Michael Coleman, signed, they personally backed up the corporate loans made by UMB Bank to Express Grain. Therefore, the agreement allows UMB Bank to go after both John Coleman and his father if Express Grain fails to pay back the $70 million it owes UMB Bank.
The bank’s complaint accuses Express Grain of misrepresenting its grain inventory used to secure loans.
It alleges that at Coleman’s direction, Express Grain “submitted false Borrowing Base Certificates and financial statements to UMB for the purpose of obtaining additional borrowing.”
The allegations made by the bank are similar to a lawsuit it filed against Express Grain in late September in Leflore County Chancery Court. It was dismissed when Express Grain filed for bankruptcy protection.
Express Grain hired CR3 Partners LLC to restructure the company in an attempt to keep it operational but sent a letter to employees earlier this month warning that the company may shut down operations and lay off employees permanently if it can’t secure additional financing to stay afloat.
Coleman’s attempt to have his personal bankruptcy case dismissed earlier this month was denied. U.S. Bankruptcy Court Judge Selene Maddox cited his “repeated failure to appear before the Court to defend allegations made against him concerning potential fraud and misconduct.”
- Contact Kevin Edwards at 662-581-7233 or kedwards@wcommonwealth.com.
