Express Grain farm group seeks conversion of case to Chapter 7

By Sarah Lizee

Olympia, Wash., Jan. 24 – Express Grain Terminals, LLC should have its Chapter 11 bankruptcy case converted to Chapter 7, a large group of farm businesses said in a motion filed Friday with the U.S. Bankruptcy Court for the Northern District of Mississippi.

In the alternative, the group wants a Chapter 11 trustee appointed to the case. As previously reported, the group had already requested the trustee’s appointment in November.

The Mississippi Department of Agriculture and Commerce has filed a cautionary motion for relief from automatic stay in order to further investigate whether some prepetition licenses issued to the debtor to operate as a “grain warehouse” and “grain deadlier” in the state should be rendered void, suspended, canceled or revoked.

“The state’s motion alleges serious violations which could lead to the revocation or suspension of the licenses to operate and has compelling domino implications to this court’s determination of rights to the grain and grain proceeds under the 557 procedures in place,” the farm group said.

“It is imperative that this court provide an immediate directional path for the parties in interest in these cases in the event the state revokes the license to operate.”

The group said that if the facts alleged by the state prove true, the debtor never had any right to use the grain and grain proceeds in this case and the significance of the loss to the farm group.

The group said it believes the company has burned through about $70 million of cash collateral in less than 120 days.

“All moving farmers were fraudulently induced by [Express Grain’s] representations that it was properly licensed and financially sound and, in reliance, shipped grain to [Express Grain] who had no legal right, power or authority to receive grain for storage or sale,” the group said.

“More than sufficient cause exists to convert the business debtors’ present Chapter 11 reorganizations to Chapter 7 liquidations, or alternatively to appoint a Chapter 11 trustee so that this matter might have a precipitous end in an organized, non-operating section 363 sale.”

Greenwood, Miss.-based Express Grain Terminals is an agricultural processing and marketing company. It filed bankruptcy on Sept. 29 under Chapter 11 case number 21-11832.

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