Hansen-Mueller Seeks Ch. 11 Extension

LINCOLN, Neb. (DTN) -- Hansen-Mueller Co. is getting closer to filing a Chapter 11 reorganization or liquidation plan but told a federal bankruptcy court it needs more time beyond a key deadline next week.

The Omaha-based company asked a federal bankruptcy judge to extend its exclusive right to file a Chapter 11 plan by two months to prevent creditors and other parties from filing competing bankruptcy plans, in a motion filed in the U.S. Bankruptcy Court of Nebraska on Thursday.

Instead of filing a plan by Sept. 15, 2026, the company asked the court to extend the period to Nov. 16, 2026.

Hansen-Mueller also asked for an extension of the solicitation exclusivity period from Nov. 14, 2026, to Jan. 14, 2027. In Chapter 11 bankruptcy, solicitation means asking creditors to vote for or against a proposed reorganization or liquidation plan.

The company appears to be making progress in its reorganization or liquidation efforts, according to the court filing.

In all, Hansen-Mueller said it has generated about $24.2 million from selling assets and has finished the grain claims process.

SURETY COMPANY CLAIMS

The most significant issue standing in the way of the company filing a plan is outstanding claims with Hansen-Mueller's surety companies, or the companies that bonded the operation, including Harco National Insurance Company and International Fidelity Insurance Company.

Those bonds essentially guarantee Hansen-Mueller's debts and obligations, but the bankruptcy court has yet to determine the amount of the claims of those companies.

In Chapter 11 cases, a debtor will typically owe surety companies reimbursement for paid claims, cash collateral, outstanding premiums and legal expenses.

"Until the court determines the legal validity of the surety claims, the debtor cannot in good faith propose a Chapter 11 plan that meaningfully addresses distributions to creditors," Hansen-Mueller said in its court motion.

Without court determination on the surety claims, the company said it is unable to determine its total estate assets, the amount and treatment of the surety claim, how creditor recoveries would be distributed and whether a Chapter 11 plan is feasible.

In asking for an extension of its exclusivity right to file a Chapter 11 plan, Hansen-Mueller said that if the court were to allow competing plans, it would create confusion among creditors, increase legal costs, create additional solicitation expenses and delay payment distributions to creditors.

"Since the petition date, the debtor has achieved numerous critical milestones, including the successful completion of asset sales that have generated significant proceeds for the estate" and the resolution of grain claims, the company said in the motion.

In addition, Hansen-Mueller told the court that the company continues to hold 465,000 bushels of oats in a Duluth, Minnesota, grain facility.

"These oats are not owned by the debtor or the estate -- they are owned by third parties pursuant to futures contracts traded on the Chicago Mercantile Exchange," the company said in its motion.

Hansen-Mueller said it continues to work with USDA regulators, warehouse receipt holders, BNSF Railway and other parties involved in transferring the grain and wants to complete the transfers before a Chapter 11 plan is filed.

Read more on DTN:

"Neb. Grain Company Files Chapter 11," https://www.dtnpf.com/…

"State Announces Hansen-Mueller Payouts," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com.

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