OMAHA (DTN) -- The members of a Minnesota farmers' cooperative have voted to dissolve and sell the cooperative's assets after the former elevator manager allegedly stole millions of dollars before disappearing in September.
The Ashby (Minnesota) Farmers Cooperative discovered it was in trouble in early September when it was uncovered that the long-time former manager, Jerry Hennessey, had written millions of dollars in unauthorized checks. Erik Ahlgren, an attorney hired by the cooperative, said Thursday auditors have identified $4.9 million in unauthorized checks.
"I can't tell you it's a final figure," Ahlgren said. "There certainly could be more. I don't think we have found all the problems yet, and we may never actually learn all of the problems."
Under Minnesota law, a cooperative has to have a membership approval if it is going to liquidate or dissolve. Ashby members voted earlier this week to authorize the board of directors to sell substantially all of the cooperative's assets, and the members voted to dissolve the cooperative. Those were both initial steps the cooperative needed to take to dissolve.
Early on, the Ashby cooperative's attorney thought there was a deal for an asset sale when the membership vote was scheduled. But Ahlgren said "a hiccup occurred" that stalled a sale because of underfunded pension liabilities.
Two weeks ago, the cooperative's 307,000-bushel grain elevator reopened under a lease with the Wheaton Dumont Co-op, which operates elevators in western Minnesota, South Dakota and North Dakota.
"It's our hope we will eventually come to an agreement to sell the assets fairly soon," Ahlgren said.
The cooperative filed a civil complaint earlier this week against Hennessey and his wife "to try to recover whatever assets we can," Ahlgren said.
Hennessey is a big-game hunter known for taking safari trips overseas, and at least some of the lost cooperative funds went to pay a Cabela's credit card, taxidermy services and hunting trips. So far, Hennessey remains in hiding from state and county investigators.
Ahlgren said he also is looking at filing claims against some of the businesses that received unauthorized funds from Hennessey "and recover as much of that as we can."
The cooperative has about 300 members who are defined as having at least $500 in transactions with the elevator over the last year.
Minnesota requires bonding, but the bond for the cooperative is valued at $125,000. Farmers can file claims with the state, but officials won't know the total projected losses until roughly five months from now. The pool of claims is determined, then divided pro rata among all of those who file.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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