McM remnant equipment sold at auction
MANVEL, N.D. — BMO Harris Bank of Chicago on Aug. 30 sold equipment collateral from the bankrupt McM Inc. farming behemoth, formerly based in St. Thomas, N.D.
Scott Steffes, president of the Steffes Group of West Fargo, N .D., which handled the sale in Manvel, N.D., acknowledged estimates that the sale brought about $1.3 million to $1.4 million. The bank claims a debt of some $42 million, either from the McM corporation or Ron McMartin Jr., who ran it.
"Agriculture is in a changing process right now, and it's completely related to commodity prices," Steffes said. He predicted more auctions if prices don't turn toward profitability.
The auction included about a dozen trailers and ten trucks — the "remnant" of the McM operation. McM also had leased tractors and harvesters, which have gone back to equipment companies. A number of tillage pieces, later-model potato harvesting and processing implements, and a line of livestock equipment also were sold at the auction. Prices of "in-season" equipment was best, Steffes said.
He said the auction is more evidence that the farm economy is returning to where it was for the 20 years prior to the go-go days from 2008 to 2012. He called the current trend a "correction" that may make for tough sledding for another 18 months.
Bank is mum
Douglas Murch, of Fargo, the local lawyer for the bank in the bankruptcy, stood and watched the bidding but declined comment. McMartin didn't appear to be in the crowd, but there were several significant potato farmers, all of whom declined comment. The crowd was respectable considering the fair day with temperatures in the low 80s at the beginning of potato harvest. Some livestock producers in the crowd said the livestock equipment brought above-market values.
McM was led by McMartin, who expanded it mostly on rented land. The company ceased operating in February.
McM ballooned to take advantage of corn prices in the $5-per-bushel range and soybeans in the $12-per-bushel range, then shifted into specialty crops, including beets, red potatoes, dry edible beans and other high-valued crops for the region. It operated a new potato handling facility in St. Thomas. McM included some 50,000 acres in 2015, then reduced to just under 40,000 in 2016.
As BMO Harris Bank attempted to get the company and McMartin into a receivership in Minneapolis, the company filed Chapter 7 liquidation bankruptcy in February 2017.
A new company, Elkhorn Farms, of Walhalla, N.D., rose up in April 2017 to farm some of the the 20,000 acres that Kenny Johnson and his cousin Al Johnson had been renting to McM. Elkhorn Farms is producing about 1,800 acres of potatoes in 2017.
$1.4M of $42M
McM listed some $50 million in debts, including about $42 million to BMO Harris Bank, the secured creditor that was selling the McM equipment after getting permission from the court to sell secured assets.
Separate from the McM bankruptcy, a Minneapolis federal judge in early August named a receiver to collect any personal assets of McMartin as an individual. The bank has alleged McMartin had misled the bank about various financial transactions, a charge that McMartin's lawyer has informally denied.
Cheryl Bergian, a lawyer in Fargo, told Forum Communications that she has requested to withdraw as Chapter 7 trustee in the McMartin case, as she's getting out of that business. Erik Ahlgren, a Fergus Falls, Minn., lawyer, had been acting as an attorney for Bergian and said he has been contacted by the court about the possibility of succeeding Bergian as trustee.