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  • Condensed by Lynda Kiernan-Stone

Judge Allows Farmers to Sell Undelivered Grain in Pipeline Food Bankruptcy Case

The bankruptcy of Minnesota-based Pipeline Foods is rippling through the organic and non-GMO grain industry. As early as May 2021, the company was exploring bankruptcy with the U.S. Bankruptcy and U.S. Trustee’s office in Delaware. However, the company kept soliciting grain from farmers in exchange for IOUs.

In a request for “cash collateral” Pipeline proposed the selling of $28.7 million in grain inventories between July 1 and October, 2021. They would additionally collect $12.7 million from accounts receivable for total revenue of $41.5 million. After expenses, the company then proposed to pay $26.9 million to secured creditors via weekly “sweeps” of the cash receipts.


Two rulings followed. On July 28, 2021, state grain regulators in Minnesota, Iowa, and Michigan requested that the company not be allowed to sell grain inventories to pay off secured creditors, as requested. And on July 30, 2021, a separate ruling allowed farmer-creditors to sell the grain that had been pledged to Pipeline through credit sale contracts to other buyers - but only farmers in Minnesota.


As many organic and non-GMO grain farmers are owed substantial amounts from Pipeline - one farming family as much as $350,000 - farmers are pushing back, saying that it was unethical for the company to continue making deals as it approached declaring bankruptcy on July 8.


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Contact Lynda Kiernan-Stone,

editor of Unconventional Ag News,

to submit a story for consideration:

lkiernan-stone@highquestgroup.com

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