By now, farmers and businesses who received letters from the VeraSun trustees who want 80 to 100 percent of the money they received by doing business with VeraSun in the fall of 2008, will have learned if and how they can defend themselves from this looming legal action.
The meeting will be held at the Best Western Starlite, at the intersection of U.S. highway 169 and Iowa Highway 7 in Fort Dodge.
I’m guessing the vast majority of these claims can be defended that those transactions were the result of normal business, rather than getting preferential treatment, as the letter alleges.
I trust those who received the letters will seek advice from a bankruptcy-knowledgeable attorney and get their replies in by the Sept. 30 deadline.
This is a big deal, but it’s also a crying shame. I’m not holding a candlelight vigil for VeraSun, but rather for those who have to defend themselves against this action.
According to the Center for Ag Law and Taxation, based at Iowa State University, this attempt by VeraSun creditors who would get, perhaps pennies on the dollar of what was owed them, have the right to recoup a portion of their losses by finding others who received preferential treatment by VeraSun – that is, the letter receivers were paid debts, rather than the letter writers.
The screwball thing is, the VeraSun trustees, called “reorganized debtors” or “reorganized creditors,” did not have to research who may have received preferential treatment. They sent this letter out to anyone who received a payment of any kind for any reason.
What is frustrating is that hundreds of VeraSun customers, who received any kind of payment from VeraSun within the 90-day period before the company filed for bankruptcy, on Oct. 31, 2008, have to incur legal fees just to defend two-year-old business transactions that shouldn’t have to have been defended in the first place.
This is bloodsucking in its finest form and it’s legal.
Whatever happened to the idea that entering into a financial agreement with another party means you accept the risks of a failed project? I can’t blame the trustees for wanting to recoup a larger share of their losses, especially if a favored vendor or corn supplier was paid a debt before the company filed bankruptcy; however, but not by causing hundreds, if not thousands, to pay legal fees to prove they didn’t receive preferred treatment.
Although it would have been a daunting task for the trustees to research who may have received preferred treatment, the trustees should be made to do their own dirty work, if it means that much to them.
Have a good week.
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