LINCOLN, Neb. (DTN) -- A Michigan farm at the center of a federal investigation has asked a federal court to allow it to sell a tract of land subject to a restraining order.
Zeeland, Michigan-based Boersen Farms Inc. has been prevented from selling property by equipment company TFG-Michigan. In 2017, the company filed a lawsuit against Boersen Farms, claiming the company had not been paid for more than 120 center pivots leased by the farm.
In a motion filed with the U.S. District Court for the District of Western Michigan on Thursday, Boersen Farms asked the court to provide relief from the restraining order to allow the farm to sell a 51-acre tract of land. Boersen Farms owes a mortgage payment to Indiana-based Farmland Capital Solutions, LLC, according to the motion.
TFG-Michigan originally filed its lawsuit in Utah and Boersen Farms was found in contempt of court in that case.
"The mortgage is in default due to BLC's inability to make payments as they become due, the next of which is due Jan. 1, 2022," the motion said.
"BLC was able to locate a buyer for the property at a price of $916,920, a fair market value price. If BLC is unable to sell the property and apply the proceeds to the mortgage, the mortgage default will be enforced by FCS."
Boersen Farms owes more than $15 million on the mortgage, according to the motion.
The IRS executed a federal search warrant at Boersen Farms on June 9, 2021, in connection with an investigation of the troubled farm. The IRS typically executes search warrants in connection to alleged financial crimes that can include tax evasion. Charges have not been filed.
Boersen Farms has for years faced a number of lawsuits from companies that provided products and services to the farm that once operated about 83,000 acres. Those lawsuits were filed in an attempt to force Boersen Farms to pay money owed to the companies.
This year Boersen Farms has been attempting to sell off assets in order to pay creditors.
In March 2021, the court temporarily lifted a restraining order against Boersen Farms that forbids the sale of farm assets. Boersen Farms recently was forced to sell three tracts of land in an attempt to pay off creditors.
Boersen Farms was sued in 2017 by CHS Capital Inc. for defaulting on a $145.3 million loan.
Boersen Farms bought the bulk of assets from now-defunct Stamp Farms LLC. Stamp Farms' owner Michael Stamp has been sentenced to time in prison in connection with charges related to his farm's bankruptcy. Stamp Farms, based in Decatur, Michigan, filed for Chapter 11 bankruptcy protection in November 2012.
Boersen Farms ran into financial difficulty when the price of corn dropped from $6 and $7 when it purchased the Stamp assets to less than $4 per bushel.
According to the CHS lawsuit, Boersen Farms received a notice of default and termination of the $145.3 million loan on Aug. 14, 2017.
The CHS lawsuit leveled a number of allegations against Boersen Farms, including that it "fraudulently and intentionally misrepresented to CHS Capital the quantity of harvested 20l6 grain available for sale, which quantity, and resulting expected sale proceeds were included in the budget."
In October 2017, LT Capital LLC agreed to take on the CHS debt and asked for a dismissal of the CHS court action against the farm.
Read more on DTN:
"IRS Raids Boersen Farms in Michigan,"
"MI Farm Defaults on Seed Contract,"
"Michigan Farm Considers Options,"
Todd Neeley can be reached at email@example.com
Follow him on Twitter @DTNeeley
(c) Copyright 2021 DTN, LLC. All rights reserved.