FARGO, N.D. - The father of bankrupt megafarmer Ron McMartin Jr. denies a bankruptcy trustee's allegation that he participated in "sham' insider transactions of his son's McM Inc. farm.

McMartin Sr., is the father of Ron McMartin Jr., who was chief executive officer of McM Inc., a farm at St. Thomas, N.D., that grew to 50,000 acres and raised high-value crops including sugar beets, potatoes, edible beans, corn and soybeans. McM Inc. filed Chapter 7 bankruptcy liquidation on Feb. 10, 2017, leaving some $62 million in creditor claims, including $43 million to BMO Harris Bank.

The bankruptcy trustee has alleged links between McM Inc. to McMartin Jr.'s parents - McMartin Sr. and his wife, Bonita. In the complaint, the trustee names the McMartin Sr. couple as defendants as well as several entities including Ronald G. McMartin Farms and "Ronald and Bonnie McMartin Joint Venture," as well as the couple's individual capacities and trustee capacities of Ronald G. McMartin Sr., and the Bonita A. McMartin Revocable Trust, and the Ronald G. McMartin Sr. Irrevocable Trust.

(Separately, there is a case with the Island Lake Irrevocable Trust, which involved a Detroit Lakes-area lake home that was transferred from McM Inc. for the benefit of McMartin Jr.'s daughters.)

In the McMartin Sr. response, filed May 14, his lawyer Theodore T. Sandberg, of Grand Forks, N.D., answered a complaint filed May 3 by Erik A. Ahlgren, trustee in the McM Inc. bankruptcy case.

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In his denial, McMartin Sr. said he wants the judge to throw out the complaint.

Among other things, Sandberg questioned Ahlgren's assertions that parents and entities are actually "insiders" as alleged by Ahlgren. They admit that "trusts were created" but couldn't respond to times or contents of those events. They also couldn't "respond to the allegation" that McMartin (Jr.) had "unfettered access" to their accounts through power of attorney.

Even though Ahlgren had separately identified McMartin Sr. and McMartin Jr. in the complaint, Sandberg claimed that the references in the lawsuit were confusing because both McMartins have the same name. (Sandberg said there was a "probability" in some allegations that Ahlgren was referring to McMartin Jr., not McMartin Sr.)

General denial

Sandberg claimed "insufficient knowledge, understanding, and/or background" on various allegations involving "farm transfers" of custom harvesting and other devices toward the parents as a way to indirectly benefit McMartin Jr.

McMartin Sr. neither admitted nor denied some allegations, saying they were "unable to provide any sort of response" on the "choices, reasons, attitudes, and intentions of other parties (notably the aforementioned nebulously named McMartin - whom we are to presume it is guessed to be Ron McMartin Jr.)." McMartin Sr. said he couldn't know McMartin Jr.'s "purposes, intentions, choices, rationale, needs."

McMartin Sr. denied information diverting $318,000 value on transfers of vehicles, farm equipment and a list of checks starting Sept. 23, 2015, to May 3, 2016.

Ahlgren had asked the judge to declare some of the transfers "voidable," meaning the money could come back to the bankruptcy estate. He also alleged constructive fraud, meaning that there was a transfer for less than reasonably equivalent value at a time when McMartin Jr. was insolvent.

Without denying everything, Sandberg also responded that some of the remedies are "overlapping and duplicative."

In one response, he said the "bankruptcy estate" itself might be obligated to indemnify McMartin Sr. for damages awarded to the plaintiff - which would also be the bankruptcy estate. Some allegations also might be covered by a statute of limitations, McMartin Sr.'s lawyer wrote.