U.S. Bankruptcy Judge Shon Hastings in Fargo, N.D., approved a mediated settlement among major secured creditors in the McM Inc. farm bankruptcy on Thursday, divvying up the $9.1 million in cash to be paid out by today, the West Fargo Pioneer reported. The Dec. 28 settlement allows 14 cents on the dollar, overall, but only for secured creditors — nothing so far for unsecured creditors, such as workers or laborers. On Feb. 10, McM Inc., a St. Thomas, N.D., farm, filed chapter 7 bankruptcy, which requires liquidation. In September, the company's owner, Ronald G. McMartin Jr., filed personal bankruptcy, also in Fargo. McM was one of the region's largest high-value crop farms, controlling some 40,000 acres in 2016, producing potatoes, edible beans and corn. Total claims are nearly $64 million, of which $48 million are secured. BMO Harris Bank has a $43 million claim but will receive about $4.9 million from this settlement.The farm at times produced about $20 million in gross annual revenue. Trustee Erik Ahlgren, a Fergus Falls, Minn., lawyer, has accumulated nearly $9.1 million in crop proceeds for the escrow account.
The Senate sent President Donald Trump a $36.5 billion hurricane relief bill Tuesday that gives Puerto Rico access to $4.9 billion in low-interest Treasury loans, amid concerns that recovery efforts from the recent disasters will require significantly more funding, Bloomberg News reported. The measure, passed 82-17, also would replenish the troubled National Flood Insurance Program, which runs out of money as early as this week. The vote followed a failed push by Majority Whip John Cornyn of Texas to insert more disaster recovery aid into the bill for his state, hit hard by flooding from Hurricane Harvey in late August. Democrat Bill Nelson of Florida also pushed unsuccessfully for up to $3 billion more for his state’s citrus industry. Cornyn told reporters Trump assured him that the White House would request the funds for Texas in November. The legislative package that passed the Senate also contains the Bankruptcy Judgeship Act of 2017 that will:
- Extend the temporary judgeships by 5 years in certain districts;
- Amend chapter 12 of the Bankruptcy Code;
- Increase the quarterly fee payable to the U.S. trustee by chapter 11 (reorganization) debtors whose disbursements equal or exceed $1 million in a fiscal year unless the balance in the U.S. Trustee System Fund exceeds $200 million.
For the full bill text and provisions, please click here.
The Senate last week unanimously approved legislation by Judiciary Committee Chairman Chuck Grassley (R-Iowa) and Senator Al Franken (D-Minn.) clarifying Congress’ intent to allow family farmers to more easily reorganize their finances when they fall on hard times, according to a press release on Friday. As a part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Congress passed a provision to address the unique financial situations of family farmers who are reorganizing their assets following bankruptcy. However, a 2012 Supreme Court ruling found that the 2005 law, as written, failed to achieve Congress’ express goal of helping family farmers. Grassley and Franken’s Family Farmer Bankruptcy Clarification Act of 2017 rectifies the Supreme Court ruling by clarifying congressional intent. The Family Farmer Bankruptcy Clarification Act reiterates Congress’ earlier action to enable bankrupt family farmers reorganizing their debts to treat capital gains taxes owed to a governmental unit, arising from the sale of farm assets during a bankruptcy, as general unsecured claims. It also removes the Internal Revenue Service’s veto power over a bankruptcy reorganization plan’s confirmation, giving the family farmer a chance to reorganize successfully.
