Published in Food/Agribusiness

Federal court orders Boersen Farms to pay $14.9 million for unpaid debts

BY Sunday, March 10, 2019 08:53pm

GRAND RAPIDS — A federal judge has ordered the financially-embattled Boersen Farms Inc., related entity Boersen Farms AG LLC, and its owners to pay nearly $14.9 million to Tennessee-based Helena Agri-Enterprises, LLC for unpaid debts.

Zeeland-based Boersen Farms was one of the largest farming operations in the Midwest with approximately 82,000 acres of land for corn and soybean crops. Starting in 2013, the company over-expanded and entered into transactions it could not support, according to court documents.

Helena alleged that Boersen Farms, in an attempt to survive, planned to downsize and transfer its farming operations to a smaller entity, according to court filings. The move to pick and choose which creditors to pay was a means for the Boersen family to retain ownership of the downsized entity and avoid paying certain creditors like Helena, the company alleged in the lawsuit.

According to court documents, Helena sold product to Boersen Farms on credit arrangements, which were to be paid within 30 days, and through financing, which provides a means of longer-term payments.

Boersen Farms Inc. for years had received loans from Helena to finance purchases and fully paid on the loans without objection until a 2016 loan for the 2017 crop year, according to court filings. Helena alleged that, as of Oct. 16, 2017, the two Boersen Farms entities collectively owed more than $7.2 million.

In a consent judgment issued Feb. 23 by U.S. District Court Judge Robert Jonker, the court calculated the sum of the total amount owed to Helena from the amounts owed by three Boersen Farms entities, plus attorney fees. The total amount is owed together by Boersen Farms, Arlan Boersen, Dennis Boersen, and Sandra Boersen.

Ronald Vander Veen, a partner at Holland-based Cunningham Dalman PC and the attorney representing Boersen Farms, declined to comment on the case.

The latest judgment comes amid a string of lawsuits against Boersen Farms, which acquired the assets of the former Stamp Farms LLC out of bankruptcy at auction for $22.8 million in 2013, doubling the amount of land it farmed and leased across Michigan, Ohio and Indiana. At the time, corn and soybean prices were more than double what they are today.

In 2017, the company was sued by one of its former major creditors, CHS Capital LLC, for $145 million in unpaid debts. CHS also alleged that Boersen Farms committed fraud by inflating the value of its 2016 crop by $6 million to give the company the appearance of profitability. Boersen Farms initially sought Chapter 11 bankruptcy protection and was placed in receivership in September 2017.

The CHS case was later dismissed when LT Capital LLC — an entity registered to the CFO at Zeeland Farm Services Inc. — assumed CHS Capital’s interests in the debts.

The same year, agricultural giant Monsanto Co. sued Boersen Farms for failure to pay more than $2.3 million in corn and soybean seeds it bought for the 2016 growing season. Furthermore, a federal judge ordered the farm to pay more than $19.5 million to TFG-Michigan LP, which does business as Tetra Financial Group, for farming equipment it leased from 2013 through 2015.

In January 2018, BB&T Commercial Equipment Capital Corp. of Malvern, Pa. filed a lawsuit against Boersen Farms, alleging breach of contract for failure to pay $268,000 for irrigation equipment leasing and financing agreements it signed in 2014 and 2015 with Philadelphia-based Leaf Capital Funding LLC. In June of last year, the company also reached a $3 million agreement with the family of two people who died in a crash involving one of its trucks in 2015, according to multiple reports.

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Read 6748 times Last modified on Monday, 18 March 2019 16:17