Bidding procedures were approved Wednesday for Express Grain Terminals LLC to sell its assets, with an auction date scheduled for Feb. 25.
Judge Selene Maddox, who is presiding over the bankruptcies of both Express Grain and its president, John Coleman, said in her order approving the procedures that the company “has shown good and sufficient business reasons” and “has exercised prudent and reasonable business judgmeant.”
According to Maddox, Dennis Gerrard, Express Grain’s chief restructuring officer, who manages day-to-day operations of the company, has testified that because Express Grain has not been able to secure more financing, the company cannot be restructured. A sale process, Gerrard said, will benefit all parties involved and invite interested bidders to make offers.
Click on Title To Read Document
She said the procedures “will ensure a competitive and fair bidding process.”
Express Grain owes more than $156 million to farmers, banks and other financial entities.
Last week, the Mississippi Department of Agriculture and Commerce revoked the company’s licenses for grain warehouses in Greenwood, Sidon and Minter City.
After an investigative hearing on Feb. 3, Andy Gipson, Mississippi’s commissioner of agriculture, determined the company had submitted a fraudulent audit report when applying for renewal of its licenses in 2021.
The document submitted to the department was found not to be the one given to Express Grain by Ridgeland-based accounting firm Horne LLP. The doctored document alters several figures and removes warnings that Express Grain was on shaky financial ground and in danger of not meeting the terms of its loans with its largest creditor, UMB Bank of Kansas City, Missouri.
He said that Express Grain is not authorized to operate as a licensed grain warehouse or a grain dealer as a result.
Express Grain’s attorney, Craig Geno, said last week that the effect of this action on the company’s bankruptcy is still being determined, but no mention of the revocation was made in Maddox’s order.
Geno said that efforts are underway to secure Express Grain’s facilities, clean the manufacturing plant and prepare employees for layoffs, which he said were expected to begin this week.
Qualifying bidders must submit bids before 5:30 p.m. on Feb. 24. A “good faith deposit” must be made with the following rates: $25,000 for the Minter City assets, $50,000 for the Sidon assets, $75,000 for the Greenwood assets or $150,000 for all assets.
Express Grain may decline bids, and other parties involved in the bankruptcy case may object to bids.
On Feb. 25, the auction will take place, starting at the best bid price that was submitted beforehand
Numerous assets are exempted from the sale, including Express Grain’s current cash on hand or in bank accounts, biodiesel tax credits and grain inventory and grain proceeds.
Once a successful bidder is chosen, a motion to sell the assets will be given to the court, at which time any party wishing to object will have the opportunity to do so.
All proceeds from a sale will be deposited in a segregated account and held pending further orders from Maddox.
The potential buyer is required to keep in its possession all relevant materials that Express Grain deems necessary to complete the bankruptcy process.
Still to be determined is who is entitled to grain and grain proceeds both before Express Grain’s bankruptcy and afterward. Maddox has scheduled a hearing March 4 to answer that question.
Depositions and discovery are underway, with attorneys representing farmers, banks and other interested parties working to bolster their respective arguments.
- Contact Kevin Edwards at 662-581-7233 or kedwards@gwcommonwealth.com.
