In recent days, numerious Nebraska farmers, and small agri-business companies have received notices issued by law firms in New Yourk on behalf of what is now known as VeraSun energy Corporation, a Chapter 11 Bankruptcy reorganized Debtor. the notices are essentially written demands on behalf of VeraSun to farmers and corn vendors demanding that all sums of money paid by VeraSun to them, in the ninety days immediately prior to VeraSun filing Chapter 11 Bankruptcy on October 31, 2008 be returned to the bankruptcy reorganized VeraSun.
In most instances, farmers that are receiving the notice letters are being told that the sale and delivery of corn by them to a VeraSun plant, for which they received payment for the corn so delivered is a “preferential transfer” in the VeraSun bankruptcy. The letters then outline the deliveries of corn made by farmers, and the payments received by them following such deliveries. Ultimately, the letters then define that all payments recieved by the farmers for corn that they delivered and sold need to be refunded back to VeraSun. As a matter of settlement, the letters then state that VeraSun will accept 80% of the amount demanded if the farmer submits the payment back to VeraSun by September 30, 2010.
Although the notice letters boldly demand the repayment of corn sale proceeds from the farmers as a so-called “preference” under Bankruptcy Code Section 547, the letters on slightly reference that the farmers may have a defense to such preference claims on the basis of the delivery, sale, and ultimate payment for the corn being a “contemporaneous exchange” transaction in the normal and ordinary course of business between VeraSun and the farmers.
Farmers, and any other corn supplier or vendors do need react, and respond, to the notices being received in order to avoid losing their rights or defenses by default. In prior VeraSun Chapter 11 Bankruptcy activities, attorneys in Nebraska organized a group of corn vendors to attempt a collective effort in addressing the VeraSun issues. While each farmer of corn vendor ultimately needs to address their particular VeraSun issues, many of the issues are common to several farmer in much the same manner.
In the initial VeraSun Bankruptcy filed in Delaware in 2008, Jim Trotter and his business, Trotter, Inc. of Arcadia, NE, was appoointed as one of the five initial members of the Unsecured Creditor Committee in that proceeding. Eventually, the group of corn farmers in Nebraska formed an “ad hoc” committee of corn vendors, and were recognized by the Delaware Bankruptcy Court. Trotter and the ad hoc corn group worked in order to voice the concerns, and present arguments of farmers and others that were named as unsecured creditors in the VeraSun bankruptcy. They are now preparing to hold an informational meeting that is open to any farmer or corn vendor affected by these so-called “preference notices” on Wednesday, September 8, 2010 at the Valley County Fairgrounds in Ord, NE. For further information on this meeting call Tom Kruml at Stowell, Kruml & Geweke, P.C., LLO law firm in Ord, NE at 308-728-3246.
