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Veteran Advisor

What happens when a cooperative goes belly up ?

recieved some disterbing gossip.

what happens when a cooperative goes belly up ?

all the patronage ? 

or worse still, all the grain, in the elevators and in bunker piles ?

 

Don't know if they can take chapter 11 or not.......knock out all the stuff they have to pay out, make out new notes on

their purchases, and have a reduction of debt.........

 

everyone wins but the owner-farmers ???????

 

what do we get to do with the board members ?????

 

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2 Replies
Honored Advisor

Re: What happens when a cooperative goes belly up ?

Patronage......GONE

 

Prepaid..........GONE

 

Any grain NOT on warehouse receipt at their place is a donation.

Grain on warehouse receipt will be paid for by your state's grain indemnity fund for less than face value.more than likely.

 

Forward priced grain, judge may force you to deliever then throw your claim for payment into that unsecured creditors pile for pennies on the $.

 

Facilities, equipment, inventory, etc Will be sold/auctioned off,  probably piecemeal to the highest bidder for pennies on the dollar.

 

I just hope you haven't loaned them any money on the side...it'll be gone like smoke in the wind too.

 (This happened in Creston, Iowa at the Crestland coop, one retired couple lost their life's savings)

 

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Honored Advisor

Re: What happens when a cooperative goes belly up ?

Well, during that "hedge to arrive" debacle in `95ish alot of elevators were broke around here, but not farmer got stiffed on their grain. That`s when all this consolidation started getting rolling, the good one`s merged with the bad one`s and they restructured, maybe getting rid of their feed business or something.

 

One coop that went broke, some of their sites merged with another coop and one site got bought by a cattle feeding outfit in Texas for corn, since then it`s been sold a couple times.  But that defunct elevator is paying off the dividends I had, every year I get paid a small check from them, the good news is I`ve already paid tax on it  Smiley Happy

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