For individual consumers and businesses, several different types of bankruptcy are available. Individuals can file Chapter 7 liquidation cases that discharge debt in exchange for the sale of non-exempt property (in most cases, a person’s property is fully exempt and one does not lose property), or they can file Chapter 13 reorganization cases that restructure debts into a 3 to 5 year manageable repayment plan fitting their particular income and reasonable and necessary living expenses. Individuals who gain the majority of their income from a family-run farming or fishing operation can also file Chapter 12 reorganization bankruptcy. You need help with the complex bankruptcy code.
This bankruptcy is similar to Chapter 13, but offers some benefits specific to family farmers and fishers. All types of businesses can file Chapter 7 liquidation, but this chapter generally forces the company to shut down operations. To file bankruptcy and maintain business operations, sole proprietorships or partnerships can file Chapter 13, while limited liability companies and corporations can use Chapter 11 reorganization to repay their debts in a structured plan. For Chapter 7, 12, and 13 in Windom, MN, and the local region, Behm Law Group Ltd. provides trusted legal protection and guidance through the complex bankruptcy code.
Chapter 11 Case
Not only does the bankruptcy code affect the filer, attorney, and court process, it can also impact other third parties involved, especially in large Chapter 11 cases. One recent example of a complicated situation came with the Chapter 11 bankruptcy of Express Grain, a Mississippi-based grain elevator and biodiesel refinery.
Bankruptcy Code
Express Grain was forced into an involuntary bankruptcy by UMB Bank due to its $70 million in loans. The bank is collecting grain harvest sales proceeds as collateral for the debt. However, there are many farmers who sold their grains to the Express Grain and have not yet been paid. In cases like this, farmers are often not paid for their labor and harvest until after the collateral grain silos are liquidated. The problem is that the farmers cannot sue Express Grain due to its September 2021 bankruptcy petition.
Rather than take action against Express Grain, three farmers (representing almost 100 farms across the Mississippi Delta) named as plaintiffs have filed a class action lawsuit against UMB Bank. The farmers’ lawsuit claims that the bank was well aware of Express Grain’s significant debt and potential collapse, but kept the agricultural company afloat through the 2021 harvest season in loans.
Bankruptcy Code Used by Express Grain
When the season ended, the bank forced Express Grain into bankruptcy while its grain silos were full. This meant the bank could liquidate the full silos for a much better repayment than it would receive if it had not supported Express Grain through the harvest. Express Grain was also able to mislead farms in the region of its financial stability by using UMB Bank loans to pay salespeople to convince farmers across the Mississippi Delta to sell their harvested crops to it.
Summary
No matter what the outcomes of this lawsuit and the bankruptcy will be, the situation has impacted the lives of many family farmers. To learn more about how farmers can use the bankruptcy code in Windom, MN, to their benefit, contact Behm Law Group Ltd. by calling (507) 387-7200 or emailing stephen@mankatobankruptcy.com.
