Farmers are used to fighting.
That is Mother Nature, buckshot and sandy clay and the impish restraints and constraints of the commodity market.
Those are foes they see and battle every day, but when the crop has been delivered, the fight is usually done and the banker man is smiling. But not in the case of many Delta farmers this harvest season.
In the recent Express Grains Terminal bankruptcy, more than 100 Delta area farmers are now part of a class-action lawsuit against Kansas City, Missouri based UMB Bank. The suit, which was filed in the last week, contends that UMB “placed tremendous pressure on Express Grain to fill its silos with farmers’ grain during the fall harvest.” Express Grain Terminal had loans with UMB, a bank with more than $33 billion dollars of assets and whose website portends the institution as “We work to live up to the highest standards - yours.”
Those farmers were either not paid or paid with checks that eventually bounced, the suit claims.
The suit was filed by Lexington-based law firm the Barrett Law Group.
P.A. Don Barrett has represented Ole Miss against the NCAA, fought for farmers against the U.S. Corps of Engineers for non-payment in taking land, dug into Target Corporation Customer security breach, helped the Magnolia State recover millions from the tobacco industry and many more.
The lawsuit looks to represent all persons and entities who deposited agricultural products with Express Grain and who did not receive payment for those products, from January 1, 2020, to October 31, 2021.
Barrett is still fielding calls from farmers and is adding them to the suit.
“I’ve never seen anything like this in my life. I think it’s the biggest disaster to hit our part of the Delta in my lifetime. It’s going to put 400 farmers in bankruptcy. It’s going to wipe out what they’ve worked for all their lives,” Barrett said. “The fraud in my opinion is palpable in my opinion. Done by the bank. They saw exactly what was happening.”
The suit contends that “Express Grain was highly leveraged, with massive amounts of debt. Its principal creditor was (UMB) the bank.”
Loans were first extended to Express Grain in 2015 and were amended and restated four times, according to court documents, the total balance being $70 million as of September 2021 with $37 million as the balance of a revolving loan and $33 million was the balance on a term note.
Part of the agreement was to take the revolving balance down incrementally to its maturity date on October 31, 2021, a time when Express Grain Terminals grain bins would be filled. According to the suit, the bank forced Express Grain to post collateral – including the grain. Barrett believes the bank kept Express Grain afloat and did not call in the loan until the grain had been secured.
“In short, the bank laid a trap for plaintiffs and the other members of the class, a trap to steal their crops and use those crops to satisfy the massive loan it had improvidently made to Express Grain,” the suit claims.
“They just stole it,” Barrett said. “They waited until those empty bins became full. The bank took advantage of what Express Grain was publicly saying. And they allowed it so they’d have more to foreclose on so they wouldn’t lose as much. They let the inexperienced people at the grain bin get in over their heads and that’s the bank’s fault. They are shoving their self-caused misery onto somebody else. They are bigger than every bank in Mississippi put together.”
The class action suit and individual suits will be filed by Barrett’s firm.
“We’ve had 30 something calls in one day. These farmers are looking for somebody to help them,” he said. “I’d be delighted to represent any farmer who wants us to. We are going to be fighting some major defense firm. I do it all the time. It takes an effort to mount a challenge to a big bank.”
The case was filed earlier this week and Barrett is expecting delay tactics but is ready to fight.
“A great disservice has been done to these farmers and the law – I learned this in law school many years ago – for every wrong, the law will provide a remedy. There’s some remedy in the American civil justice system and we are going to find it and we are going to vigorously prosecute this case. This is a financial tsunami to the Delta area and we’re going to do something about it.”
If you have information to share about the Express Grains Terminal Bankruptcy or any cases involving it, please contact Mark H. Stowers at 248.298.9444 or email writerstowers@gmail.com.
