Judge to consider operating trustee in case of ND farmersFARGO, N.D. — The former Keeley & Grabanski Land Partnership in Texas may see a turning point March 30, when a judge in Fargo, N.D., again considers whether to appoint an operating trustee to handle the company’s affairs.
By: Mikkel Pates, Agweek
FARGO, N.D. — The former Keeley & Grabanski Land Partnership in Texas may see a turning point March 30, when a judge in Fargo, N.D., again considers whether to appoint an operating trustee to handle the company’s affairs.
The partnership (since 2009 doing business as Grabanski Land Partnership) was formed in 2007 for Texas farming operations between farmers Tom Grabanski and John Keeley of Grafton, N.D., and their wives. K&G Land, along with a separate farming partnership, operated more than 10,000 acres of corn and sunflowers from 2007 to 2009 in two locations in Texas near the towns of Blossom and DeKalb.
In July 2010, Grabanski, now 41, filed personal Chapter 11 bankruptcy, as well as for a grain elevator in Grafton. Since then, he’s faced a slew of legal challenges from creditors on all three bankruptcies, including alleged misrepresentation of financial statements. Separately, his Colorado farming partnerships are challenging the U.S. Department of Agriculture’s Risk Management Agency for withholding payments from a so-called corn GRIP crop insurance program from 2009.
John Keeley and his wife, Dawn, in December forced the Keeley & Grabanski Land Partnership into a third Chapter 11. They thought they were out of the partnership but were a creditor, and were being billed for its obligations. Now, they say Grabanski is failing to accept a reasonable offer to purchase land in Texas that could pay off them and other creditors.
On March 22, Keeley for a second time asked U.S. Bankruptcy Judge William Hill for an expedited hearing to decide whether to appoint an operating trustee so that the land in Texas can be sold.
Keeley says that on March 8 a company called U.S. Farming Realty Trust LP offered to buy 2,300 acres near DeKalb for more than $3 million and 1,880 acres near Blossom for $4.5 million. He says the U.S. Farming Realty had offered $250,000 in earnest money and will allow G&K to harvest and own the “2011 winter wheat crop.” In 2007, the partnership paid Eldon Lenth about $2.1 million at 7 percent interest for the land in DeKalb. They also leased irrigation equipment from Irrigation Financial Solutions L.L.C.
Keeley originally was in the partnership but left it in late 2009. The Keeleys forced their old partnership into bankruptcy because they still found themselves involved in its debts. Among other things, the bankruptcy stopped Lenth from completing a foreclosure sale in early December.
Lenth, reached by Agweek, says he’s confused about what is happening with the De Kalb land and didn’t know about the price in the land offer. He says Grabanski recently has been planting corn on some of the property, and that he doesn’t know whether any winter wheat is planted there. In one court document, Grabanski testified he now is an employee of Louis Slominski, Jr., for about $46,800 a year.
In a separate issue on his personal bankruptcy, Grabanski and has sold some land in Walsh County, N.D., according to a court-approved agreement. The deal involved a swap with some land that historically had belonged to the Grabanski family for more than 100 years. Grabanski’s attorney said that sale would provide a “significant credit” toward AgCountry Farm Credit Services debt and would “allow breathing room” to resolve issues with Choice Financial of Grafton.
It isn’t clear whether the proceeds in the sale are for the personal bankruptcy or the grain company, and the AgCountry attorney declined comment.
In the personal bankruptcy, the trustee Bruce Gering of Sioux Falls, S.D., questioned to AgCountry’s being treated “singularly” in a “rather vague way,” and said Grabanski’s plans indicate “they believe the Chapter 11 reorganization process consists of making side deals with secured creditors prior to proposing a plan” for reorganization. Other creditors, including PHI Financial, the so-called Hanson-Tallackson parties of Grafton, also objected, and said Grabanski is asking for extensions on deadlines for getting creditors to accept reorganization plans, even as he’s been late in filing the plans. The Hanson-Tallackson parties said the “only viable plan is liquidation.”