Hansen-Mueller Co., a grain company based in Omaha, Nebraska, filed for Chapter 11 bankruptcy, leaving some Texas farmers without payment.
According to court documents, Hansen-Mueller reports owing creditors in 34 states with Kansas being hit the hardest with at least 128 creditors, followed by Nebraska with 87 and Texas with 72, Minnesota at 62, and Missouri, with 52.
The company listed between 1,000 and 5,000 creditors and estimated both its assets and liabilities at between $100 million and $500 million and the board of directors determined that a court-supervised process is the most effective and efficient way to achieve an orderly sale of assets and will maximize the value of the assets for the benefit of creditors, employees and stakeholders.
David Gibson, Texas Corn Producers executive director, told the Texas Farm Bureau Radio Network they have been reaching out to farmers impacted by the bankruptcy.
“Hanson-Mueller is a federally licensed facility, and with the government shutdown, we weren’t able to do a lot of tracking until Congress resolved that issue,” Gibson said. “By that time, we were getting a lot of calls from producers saying they weren’t getting paid. Once the bankruptcy filing was done in Omaha, Nebraska, we were able to access a list and begin reaching out and trying to help answer the questions that we were being asked.”
Texas Corn Producers said in a news release that farmers affected by the bankruptcy should consider seeking legal counsel to assess the options available to them. He noted there are at least 30 to 40 farmers in the state who had contracts to deliver their grain and were impacted by the bankruptcy.
“Unfortunately, it seems these farmers who are already facing a troubling economy with razor- thin margins will now be left to wait for payment for grain that’s no longer accessible,” Gibson said.
Hansen-Mueller does not hold a Texas Department of Agriculture (TDA) grain dealer license, as the company is licensed and operates under the authority of the U.S. Department of Agriculture (USDA).
The TDA advises farmers who have not received payment or fear non-payment to consider filing a Uniform Commercial Code Financing Statement (UCC-1) with the Texas Secretary of State to protect their interests.
Texas Agriculture Commissioner Sid Miller released a statement saying that every grain producer who has worked with Hansen-Mueller should check their records, confirm delivery receipts and ensure documentation is in place. Hansen-Muller Co. operates four terminals in Houston, Texas; Duluth, Minnesota; Superior, Wisconsin; and Toledo, Ohio. The company also owns an oats processing plant in Toledo that produces pet food and animal feeds, and leases trading offices in Ohio, Nebraska, Kansas, Missouri, Louisiana and Alabama.
In a declaration filed with the court, chief restructuring officer Michael Compton said the company has 'struggled financially' during the past few years primarily because of a series of unsuccessful business ventures including an unsuccessful conversion of a pasta plant which lost $15 million, the unsuccessful development and implementation of a proprietary trading software program which lost $11 million, and the inability to integrate eight elevators for a loss of $10 million and a loss of about $3.5 million in arbitration. He additionally pointed at the president's tariffs as a major challenge.