UMB Bank is calling for a federal bankruptcy court to approve the settlement for Express Grain Terminals’ grain assets.
The bank filed a response on Monday to an objection from some farmers, calling the objection “gamesmanship.”
The settlement was proposed earlier this month. Express Grain has an estimated $57 million in segregated bank accounts, a sum of money referred to in court documents as the “disputed grain asset pool.”
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Farmers and their lenders argue that they delivered product to Express Grain that was never paid for and the grain assets are theirs.
UMB Bank, StoneX Commodity Solutions and Macquarie Commodities — known as the warehouse receipt holders — counter that the company sold them the legal rights to the grain.
Dissenting farmers — those who will disclaim their interest in the grain assets — filed an objection last week asking for language to be inserted into the settlement. Their concerns focused on protection for their claims in other court action.
Three of these dissenting farmers are leading a class-action lawsuit against UMB Bank. They argue the bank knew of Express Grain’s financial troubles and conspired to keep the company afloat to seize its grain as collateral. The bank has denied the accusation.
In its response this week, the bank argues that the disclaiming farmers should receive no protection as they are not actually a party to the settlement. In addition, UMB says the settlement does not alter the rights of any party and farmers are free to pursue any action they see fit.
The bank maintains that farmers who have chosen to disclaim from the grain assets should be held to that decision. The choice, they argue, should be final unless the court disapproves of the settlement.
“The waiver executed by the Disclaiming Farmers clearly states they are waiving and disclaiming their interests in the Disputed Grain Asset Pool and that they do not plan to participate in the 557 proceedings,” the bank said in its response.
The 557 proceedings are for those who will not join the settlement but will continue their legal fight in the bankruptcy proceedings for their share of the grain.
“Any legal implication that such a decision carries with it in other litigation should be left to other courts to decide,” the bank concludes.
Should the settlement break down, the court will move toward a final determination hearing, a complicated trial that will seek to determine rights and priorities to the grain assets.
- Contact Kevin Edwards at 662-581-7233 or kedwards@gwcommonwealth.com.
