Trustee studies McM records
FARGO, N.D. —— The trustee in the Chapter 7 bankruptcy for McM Inc. of St. Thomas, N.D., says she is reviewing the farming company's bank records to ensure that financial transfers made prior to the filing are in order.
McM filed liquidation bankruptcy on Feb. 5, after farming 39,000 acres in 2016. The company was one of the region's largest farming entities, raising high-value crops.
Trustee Cheryl Bergian, a Fargo lawyer, tells Agweek the document review process will take some time. In the meantime, U.S. Bankruptcy Judge Schon Hastings has approved a few changes in the management of perishable assets in the case.
BMO Harris Bank, the primary operating lender with U.S. offices in the Chicago area, has the primary interest in a herd of cows, and will manage that asset until the cows can be sold after calving in a few weeks.
Kyle Zak, a former foreman with McM, and now an employee of landowner/creditor Kenneth Johnson of Walhalla, N.D., had been supervising two of the trustee's employees in caring for the cattle. The cattle are being kept on property owned by Johnson. Bergian said she didn't know exactly how many cattle there were, but one source connected to the farm thought the figure would be around 400 head.
Some 50,000 to 60,000 hundredweight of seed potatoes in storage at Crystal, N.D., under Michael Hilde's supervision, were abandoned as of March 31. Bergian said the cost of maintaining the potatoes exceeded their value in the market, "even if the potato seed could be sold in a secondary market." She said it would be up to the warehouse owners to dispose of the potatoes.
As of late April, custom harvesters were halfway through 2,200 acres of corn from the 2016 crop, and the court approved the $180,000 to harvest crops, or about $81.80 an acre. Landowner Kenneth Johnson had paid $20,000 up-front to Erickson Custom Operations of Colfax, N.D., which will be paid out of the proceeds of the corn.
The creditors are in the middle of adversary proceedings relating to the priority order for creditors from crop sales or crop insurance claims. But those don't affect unsecured creditors because of the amount of debts compared to assets, Bergian said.