VeraSun Attorneys Retract Demands For Farmer Payments

VeraSun Attorneys Retract Demands For Farmer Payments

Corn growers faced a Sept. 30 legal deadline to repay money for corn they sold to a company that owned ethanol plants in the Corn Belt but went bankrupt in 2008. Those growers got some good news on Sept. 29, 2010--VeraSun's lawyers are dropping their questionable claims for payment.

Corn growers who faced a legal deadline to repay money from corn sold in 2008 to the bankrupt ethanol producer VeraSun received some good news September 29, 2010 – the attorneys for VeraSun are dropping their questionable claims for payment. The VeraSun lawyers are no longer demanding that the farmers re-pay the money for their corn back to the bankrupt ethanol company.
 
In late August 2010 hundreds of corn farmers in Iowa, and a number of them in other states where VeraSun also operated ethanol plants, received letters from attorneys threatening legal action. The letters offered to settle the matter with a payment equal to 80% of what the farmers received for their corn sales to VeraSun. Farmers had until Thursday September 30 to respond.

Many farmers got threatening letters from VeraSun's lawyers

The National Corn Growers Association and several state corn grower associations, including the Iowa Corn Growers Association, provided information to growers and encouraged them to respond to the letters from VeraSun's lawyers before the September 30 deadline. "Don't ignore the letter if you received one from VeraSun," advised Don Mason of the ICGA.  NCGA and ICGA helped farmers find attorneys who specialize in bankruptcy issues to write the letters for the farmers to send to VeraSun's lawyers.

In a strong message sent earlier in the week to law firms representing and demanding payment to VeraSun, an attorney assisting the National Corn Growers Association in conjunction with states like Iowa insisted that the VeraSun lawyers withdraw their demands.
 
"We believe that many of the foregoing demands were made without any legal and factual foundation and, as such, constitute an impermissible effort to collect alleged debts that are clearly not now being collected," wrote attorney David Lander of the Thompson Coburn law firm. "These decisions appear to have been made without the inquiry reasonable under the circumstances. Moreover, we believe that the claims asserted in the vast bulk of these letters are not warranted by existing law or a non-frivolous argument for the extension, modification or reversal of existing law or the establishment of new law."

Status of grain elevators in regard to repayment demands is unclear

What about grain elevators that sold corn to VeraSun and received these letters from the lawyers seeking payment? Erin Herbold, staff attorney for the Center For Agricultural Law at Iowa State University, says she's heard conflicting reports on whether or not the law firm representing VeraSun is still demanding that grain elevators pay back the money the elevators received from VeraSun for corn sold to the bankrupt ethanol producer. "We will report to the public the information on that question as soon as it gets sorted out and we can answer it," she says.

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