Express Grain Terminals’ largest creditor is asking that a class-action lawsuit filed against it by several farmers be dismissed, according to documents filed in court this week.
The lawsuit against UMB Bank was filed in early November in the U.S. District Court, Southern District of Mississippi. Filing plaintiffs include Porter Planting Co. Partnership of Greenwood, Wyatt Farms Partnership of Tchula and Island Farms LLC of Holly Bluff. UMB Bank is based in Kansas City, Missouri.
The plaintiffs allege in their lawsuit, which is one side of a legal argument, that the bank knew in the early part of this year of Express Grain’s precarious financial condition but postponed taking action until crops were harvested so as to improve the bank’s chances of recovering more of what it was owed. The lawsuit claims the bank “aided and abetted ... fraud perpetrated by Express Grain by remaining silent with full knowledge that Express Grain’s customers would deliver their products without being paid for them, and propping up Express Grain” to ensure grain deliveries so the bank could seize the grain as collateral.
UMB Bank has responded by stating simply, “Plaintiffs have sued the wrong party,” alleging the farmers’ losses are not its fault.
The response states that because the farmers delivered their grain to Express Grain with the expectation that Express Grain would pay them, Express Grain must be held responsible for the lost money, not the bank.
“Dismissal does not leave Plaintiffs without recourse,” the response states.
If the farmers are concerned about claiming lost money from Express Grain, the bank refers them to the company’s ongoing bankruptcy case and states they should “assert their rights as creditors.”
The bank also filed a document with the U.S. Bankruptcy Court for the Northern District of Mississippi regarding Express Grain’s loan request of up to $30 million.
The bank asserts it has been negotiating in good faith with Express Grain to provide financing and doesn’t want to see the company endure “a crash landing.”
It maintains that Express Grain owes more than $70 million in outstanding principal and $222,000 in interest. It also claims a security interest in Express Grain’s “real and personal property including, without limitation, inventory, accounts, and farm products.”
The Mississippi Department of Agriculture and Commerce filed an objection to Express Grain’s loan request from UMB Bank this week, alleging that the company filed altered documents in pursuit of its renewal of licenses to operate grain warehouses. A hearing to address the department’s allegations with the court is scheduled for Jan. 6.
- Contact Kevin Edwards at 662-581-7233 or kedwards@gwcommonwealth.com.
