OMAHA (DTN) -- The legal case against Boersen Farms in Zeeland, Michigan, is nearing an end. A court motion was filed Wednesday that would dissolve the receiver in what was a case set for Chapter 11 bankruptcy.
O'Keefe and Associates Consulting, LLC, the court-appointed receiver in the case, filed the motion in the U.S. District Court for the District of Western Michigan. A receiver was appointed to operate the farm in the event of bankruptcy proceedings.
The 80,000-acre corn and soybean operation had been sued by CHS Capital LLC for defaulting on $145.3 million in loans. A newly formed Zeeland-based lender, LT Capital LLC, agreed to take on the debt on Oct. 4 with plans to dismiss the lawsuit.
According to the new motion, on Sept. 22 the receiver had recommended moving Boersen Farms toward Chapter 11 bankruptcy.
LT Capital LLC based in Zeeland filed for articles of incorporation with the Michigan Department of Licensing and Regulatory Affairs on Sept. 29, 2017, according to the Michigan Secretary of State's office. The filing documents list Brian Terborg as the resident agent of the LLC. A person of that same name is listed as CFO of Zeeland Farm Services Inc., a family-owned agriculture services business based in Zeeland.
When contacted by DTN, Zeeland Farm Services Assistant Marketing and Communications Manager Gary Brower offered the following statement: "LT Capital, LLC is a lender affiliated with Zeeland Farm Services, Inc. LT Capital's goal is to ensure that more than 80,000 acres of crops get harvested and marketed, rather than go to waste in the fields. It is our hope and desire that doing so will leave Boersen Farms with the potential for more resources to resolve other matters, in which neither ZFS nor LT Capital are involved."
When contacted by DTN last week, Boersen attorney Cody Knight said about the new lender, "It is a Michigan-based company. We are very pleased to have a new lender. We are harvesting and planning for the future."
According to a news report that aired on Wood TV 8 in Grand Rapids, Michigan, Boersen Farms faced a number of other smaller lawsuits totaling about $3 million.
The farm had been sued by equipment companies and others, and the CHS lawsuit alleged Boersen farms used more than $200,000 in CHS' cash collateral to buy a $614,000 house.
Boersen Farms also faced a related lawsuit in Utah.
In U.S. District Court for the District of Utah, equipment company TFG-Michigan filed a lawsuit claiming it has not been paid for more than 120 center pivots leased by Boersen Farms. Boersen Farms was found in contempt of court in that case. In U.S. District Court for the District of Kansas, Boersen Farms was sued for breach of contract related to its pursuit of finding someone to acquire the CHS debt.
On Tuesday, the Utah court entered a $16.3 million judgment in favor of TFG-Michigan.
In 2013, Boersen Farms bought the bulk of land-lease agreements and other assets of Stamp Farms LLC based in Decatur, Michigan, in what was considered one of the largest farm bankruptcies ever in the U.S.
Stamp Farms, which was previously owned and operated by Michael Stamp based in Decatur, Michigan, filed for Chapter 11 bankruptcy protection in November 2012. The court held an auction on Feb. 5, 2013, to sell the farm's assets in bulk, including irrigation equipment and unexpired three- and five-year leases on a farm that once claimed to operate across 46,000 acres.
Boersen submitted the so-called stalking horse bid of $22.8 million for the bulk of Stamp Farm assets. Such bidders are typically known by the debtors and are asked to submit a bid in order to establish a floor against unreasonably low offers.
Todd Neeley can be reached at firstname.lastname@example.org
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