Lender Exits Grain Farmer Loan for Expected Value
70M
Annual Sales
250M
in Debt
Boersen Farms, Zeeland Michigan
Challenge
One of the largest family farming operations in US. 100k acres farming corn and soybeans doing $70 million of sales. MorrisAnderson represented the largest secured creditor who had $250 million loan secured by 15k acres of land, $40 million of grain inventory and secured liens on other real estates.
- Company dramatically expanded size of operations while farm commodities prices were high.
- With dramatically reduced community prices, company was bleeding cash, significantly over-leveraged and had collection litigation problems from several major creditors.
- Company had no cash reserves going into planting season.
Solution
- MorrisAnderson negotiated loan amendment whereby company provided quit claim deeds on 15k acres of previously 1st mortgaged land in exchange for ability to use collateralized proceeds of inventory sales to fund planting season costs and to give company a chance to effectuate a turnaround plan.
- MorrisAnderson consultant was on-site to daily monitor cash, inventory and other company actions to safe guard lending collateral.
- Provided real time information daily to lender and its counsel.
Results
- Lender was free to sell its 15k acres of valuable farm land after harvest.
- Negotiated the sale of balance of lender’s collateral position for a cash amount acceptable to the lender.
- MA’s lender client was pleased to exit this loan for acceptable recovery.
