Express Grain: Coleman Responsible for Debts
During the early stages of the Express Grain Terminal’s downfall in Greenwood, chairman and co-owner, John Coleman kept saying a bailout was coming. The hopes of an equity investor have never been realized. Last week John
Coleman was found liable for the $71 million owed to UMB Bank under his management of EGT in a final judgment by default. The court order granted UMB Bank $71 million plus court costs and legal fees. Even if Coleman gets a bankruptcy discharge, this debt will still be due. This allows the UMB to go after any potential income Coleman may have once the bankruptcy filing is complete entire course.
UMB filed a lawsuit against Coleman in January, saying Coleman misrepresented EGT soybean inventory – a figure used to obtain loans from UMB. There was also documents submitted by EGT showing that Coleman had signed for the loans and was liable if his company did not repay the loans. Coleman still has no provide responses to previous hearing dates. Coleman was not available for commentary and the Express Grain Terminal website still shows him as president.
And the news keeps getting worse for Colemans as his father, Dr Michael Coleman – a 99% owner of EGT – and Coleman’s wives are now liable for $1.1 million dollar indemnity obligation. The Travelers Casualty and Safety Company of America filed a lawsuit in court on Tuesday afternoon. EGT had obtained a “grain store surety and/or a surety from grain traders. Grain warehouses must secure the bond in order to to get their state license. EGT’s license was revoked by the State of Mississippi Ag Commission when found to have fraudulent financial information was filed in the license application. Traveler’s issued a $1 million bond in June 2019 for the portion of the grain warehouse and $100,000 for the grain Dealer’s deposit. Last December, the Mississippi State Attorney General “has informed Travelers that a demand for payment of debts by sellers, depositors or grain storers against Express Grain and Travelers would be coming.
A petition for determination and payment of claims was filed in March 2022 by the Department of Agriculture and Commerce. Travelers had already “asked the Indemnifiers in a letter dated December 17, 2021, in full and complete release the Travelers from the deposit or provide an irrevocable letter of credit within the amount of $1,100,000 no later than January 1, 2022.”
EGT had not honored its obligations under the indemnification agreement nor they did not provide any collateral guarantees. Dr. Coleman and Coleman’s wives are now responsible for the $1.1 million bond. John Coleman is in personal bankruptcy and cannot be sued leaving the other co-signers responsible.
In other EGT bankruptcy news, the proposed grain proceeds settlement in Possession of EGT was discovered in court documents. Petition 9019, filed April 12, shows that the $58 million in segregated bank accounts would primarily go to UMB Bank, StoneX Commodity Solutions and Macquarie Commodities. Over $48 million will be divided among creditors and farmers who join the settlement are is expected to split $9.2 million. The caveat being that farmers who join 9019 motion cannot be part of any other lawsuit. Lexington attorney Don Barrett is still registering farmers and pursuing a class action lawsuit against UMB Bank. The farmers are decide which course to take.
The settlement has not been approved by the court and a hearing is set for April 25.