GREENWOOD, Miss. -- A class-action lawsuit representing farmers left unpaid for 2021 crops delivered to a Leflore County grain storage business this harvest season has been filed against a Kansas City, Missouri, bank that, according to the suit, holds all of the company's assets as collateral.
Three plaintiffs, including the Greenwood-based Porter Planting Co. Partnership, are demanding actual payments and “all available damages” on their behalf and Express Grain Terminal’s other uncompensated farm customers from UMB Bank, N.A. Hundreds of farmers are involved, according to one of the plaintiffs’ attorneys, Don Barrett of Lexington. Among these are the two other plaintiffs in the lawsuit: Wyatt Farms Partnership in Tchula and Island Farms LLC at Holly Bluff in Yazoo County.
Porter Planting Co. is operated by John Doty Porter of Greenwood, who did not immediately respond to attempts to contact him, and members of his family. They are his wife, Gale McNeer Porter; his son, John Doty Porter Jr. ; and his daughter-in-law, Mary Gregory Porter, all of Greenwood. Wyatt Farms is owned by William T. Jones and Elizabeth T. Jones, both of Holmes County. The Island Farms owners were not identified.
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The complaint, which was filed Nov. 8, represents only the plaintiffs’ side of what occurred.
Express Grain, which operates a soybean processing facility in Greenwood in addition to its grain storage business, is not eligible to be a defendant in the lawsuit because it has declared Chapter 11 bankruptcy, Barrett said.
The complaint in U.S. District Court in Jackson alleges that the farmers did not know that Express Grain was on the cusp of bankruptcy when their grain was delivered to the company’s terminals, which are mainly located in Sidon.
The complaint claims that Express Grain was “effectively insolvent” by the spring of this year but the bank waited to take action against the company until harvest time, when Express Grain would have more grain on hand that the bank could seize as collateral.
According to the complaint, Express Grain had two outstanding loans from UMB Bank with a
combined balance of $70 million as of September.
“The Bank placed tremendous pressure on Express Grain to fill its silos with farmers’ grain during the fall harvest. During a brief window of time, those farmers would transfer title to the grain warehouse in anticipation of prompt payment,” the complaint asserts.
“Express Grain represented to farmers that it was prospering, when the truth, known to the Bank, was that it was insolvent. The Bank propped up Express Grain just enough to allow it to survive into harvest season, when farmers would be delivering enormous quantities of grain. When the inevitable default occurred, the farmers went unpaid, and the Bank effectively seized the grain,” according to the complaint.
But the farmers still held title to the grain between delivery and payment, although in this situation, many either did not receive payment or were given checks that bounced, the lawsuit argues. It also notes that the farmers had possession of their grain until it was delivered and therefore could have delivered the grain elsewhere. Instead, they were being “misled.”
The lawsuit argues that Express Grain fraudulently misrepresented its financial situation to its farmer customers. The complaint offers several communications written by the company’s president, John Coleman, to back the allegation.
The bank filed to put Express Grain under receivership in Leflore County Chancery Court on Sept. 28. Also on that date, Coleman wrote an email to customers that said Express Grain had received the second largest corn harvest in its history, 7.5 million bushels, of which 6.5 million had been shipped out to market.
“We are steadily crushing beans, and will start shipping trains of beans, so we have ample space for everyone. I also wanted to let you know that we are in good shape financially. We have funding in place from multiple sources to make sure everyone gets paid on time. Stay safe out there and keep those combines rolling!” he wrote.
The company filed for bankruptcy protection the next day.
Regarding the lawsuit, Coleman said in an email the day it was filed, “I know this has a lot of people in a tough spot, but please know I and the rest of the Express Grain team are putting every effort into finding the best solution for everyone including farmers, lending institutions, and any other creditors. Even though things might look bleak in the current state, there is a real chance that at the end of the day everyone goes home satisfied. The plan I am working takes some time to develop, but it is the only one which makes everyone whole, and that is my primary focus.”
The plaintiffs are asking for a jury trial.
Barrett said during an interview that other farmers are likely to either file actions in circuit courts or join the federal lawsuit. “They are the backbones of their communities. They are the backbones of their churches. They have been, in my opinion, cheated, and the first thing I learned in law school decades ago was that for every wrong, the law provides a remedy.”
- Contact Susan Montgomery at 581-7241 or firstname.lastname@example.org.