Royal Star Farms?

[hardnox604008]

Anybody know anything additional about this?

IT appears that on top of the 3 Stamp Farms entities that are discussed in media pieces about the bankruptcies there is also a filing on the same day, same address, same law firm for Royal Star Farms.

Which interestingly lists assets of less than $1 million and liabilities in excess of $50 million.

I suppose there is something there I don't understand but on surface certainly sounds like something that would require some 'splainin' to the US Attorney for the Western District of Michigan, if there happens to be a warm body in that seat.

[Canuck_2]

My discussion with my accountant today would not indicate any farms should be going bankrupt right now. His concern was for the ones who are expanding now and the cash flows he has seen with todays costs including higher rents that they will be at breakeven with just a small downturn in prices.

His biggest problem is his clients all want him to 'hide' big profits so they do have to pay tax.

Says he has clients who are 3 or more years out of sync with prepaid expenses and inventory not sold or priced and cheques not taken.

[BA Deere]

At 1:10 he says "multiple bankers have laughed me out of their office...I wonder what they`re thinkin` now."   Indeed, I do wonder "what they`re thinkin` now".   http://www.youtube.com/watch?v=ffXogSFN6IY   I don`t care what kind of whiz-bang kid you are, going from nothing to 40,000 acres in less than 10 yrs, alotta corners gotta be cut.  Just my 2¢

[Shaggy98]

I agree BA, way to much way to fast.  It sounds like this this kid wasn't afraid to work and with the Yield Contest it sounds like he knew something about farming as well.  Maybe he didn't manage the yield contest plot, maybe he just paid for it and therefore got his picture with it.  Speaking of management, sounds like that is the one area this 37 year old was lacking there of.  I am older than 37, and I know I would never attempt to manage 40,000 acres.  Wouldn't even consider 50% of that.

How does one not see this coming?  Oh ya, his wife ran the office, huh interesting.  Do you think this kid knew what it felt like to be operating on the top side of the balance sheet?  Makes you wonder were local machinery dealers as well as all the supporting equipment a 40,000 acre operation requires to operate, were all just riding the high of sale after sale?  Now they can join the rest of the creditors in the court system.

[hardnox604008]

Yes.

Once  or twice in your lifetime it pays to be in over your head.

Those are the geniuses, by luck or design.

This has been one of those times. therefore I have to assume that there is a huge error, fraud or both at the heart of this thing.

[hardnox604008]

Alternately, could be a strategic bankruptcy i.e., lawyer enabled semi-legal fraud.

I noticed the other day that someone local was lamenting how bad it was for the community. Not so sure- if you look at the creditors it is mostly big boys from out of town and a few of what I assume are strategically selected landlords.

One good thing about the "new paradigm" of buying everything direct is that it is mostly monsanto, pio, JD on the hook and they are big boys who made thieir own choices.

[SpringBrookFarm]

These top producer awards are very far away from awarding the top producer. If your the biggest farmer in US then you can get this award. Doesn't matter how efficient you are, wheather you actually make a profit or not. Just as long as you have the most acres.

[hardnox604008]

apparently the whole thing was triggered by the failure of an audit of the elevator subsidiary, Northstar Grain on November 9th.

Old story.

[Kay/NC]

Even the biggest single operator would ba a drop in the bucket, to a global corp like Monsanto, don't you think?  Mice probably eat more seed in storage...

[clayton58]

Don't pio, Big M ,JD, etc. raise their prices for the rest of us to make up for these losses?