What is in this article?:
- VeraSun Corn Suppliers Must Take Action to Letter by Sept. 30
- Keep three things in mind
- Do not ignore this matter
- Seek advice of bankruptcy attorney
- Gather copies of all transaction documents
Keep three things in mind
Steve Moline, of the Iowa Attorney General’s office, told those attending that letter recipients must keep three things in mind. “Do not ignore this matter. Seek advice of a bankruptcy expert before making any payment or offering to settle. And gather and copy all of your VeraSun transaction documents for your attorney so a response can be formed immediately,” Moline says.
Erin Herbold, staff attorney with the Center for Agricultural Law and Taxation (CALT) at Iowa State, outlined the suppliers’ legal options and discussed the defenses suppliers have. “Suppliers who did nothing wrong are being asked to provide information to the trustee to establish their defenses,” said Herbold. “Some will have strong defenses and the trustee may cease further inquiry; some suppliers will have partial defenses that may provide room for negotiation for a lower settlement; and some will have no defense.”
Herbold continued with explanations of the three traditional defenses, but to determine a supplier’s best defense, she referred back to Moline’s three points. “Gather documentation and get it to a bankruptcy lawyer immediately, there isn’t any time to waste,” she says.
Bankruptcy attorney Joe Peiffer, Cedar Rapids, provided a list of documents that suppliers should gather for their lawyers. Those documents include:
• Copies of all documents and/or correspondence received from VeraSun regarding how and when it would pay for corn purchased from corn suppliers.
• Copies of all scale tickets for corn sold to VeraSun at any time, not just the checks in question.
• Copies of all settlement sheets for all corn sold to VeraSun at any time.
• Copies of all contracts for sale of corn to VeraSun with delivery before Oct. 31, 2008.
• Copies of all deposit tickets for checks received from VeraSun at any time.
• Copies of all checks deposited from VeraSun.
“These documents need to be provided to your bankruptcy attorney immediately so the attorney can draft a response to the preference demand letter by the Sept. 30 deadline,” Peiffer says. “Failure to respond to the preference demand letter could result in the supplier being sued in bankruptcy court in Delaware.”