Court says VeraSun must work with suppliers’ reps
Iowa Corn Growers Association wants all contracts honoredBy LARRY KERSHNER, Messenger staff writer
Fact Box
VeraSun owes Fort Dodge water bill
Corn growers aren't the only group owed money by bankrupt VeraSun Fort Dodge.
The company failed to pay its Oct. 20 water bill, according to Fort Dodge City Manager David Fierke. He declined to release the amount of the bill, saying he wanted to ask City Attorney Maurice Breen if that information can be made public.
Fierke said that bill is the only one VeraSun failed to pay. He added that the city government will become a creditor in the ethanol-maker's bankruptcy because of the unpaid bill.
In 2004, before the plant opened, city officials estimated that VeraSun's monthly water bills would be $24,618.
The ethanol plant west of the city uses about 300 million gallons of water a year.
Iowa attorney general to address VeraSun issues
Steve Moline, of the ag division of the Iowa attorney general's office, will present an update and answer questions on VeraSun issues at 1:30 p.m. Dec. 9 in the Clare Community Building, Clare.
The complexity of the bankruptcy, the effects on farmers, the expectations over the next 12 to 18 months, and an opportunity to ask questions will be included in the program.
Aaron Moore, director of Webster County Farm Services Agency, will follow the VeraSun segment with an update on the overall Farm Bill program.
For more information, contact Jim Patton at the Webster County Extension office at 576-2119.
A group of about 100 corn suppliers with outstanding contracts to deliver corn to VeraSun Energy's 22 ethanol plants got their day in court this week, but they found the results not entirely satisfactory.
The motion, which was joined by the Iowa Corn Growers Association, was heard Tuesday in VeraSun's bankruptcy hearing in Delaware.
"We would like the court make VeraSun honor all contracts," said Gary Edwards, an Anamosa corn grower and president of the ICGA. "But bankruptcy laws won't allow that. So we got the next best thing and we did get VeraSun's 10-day rejection notice eliminated."
Edwards said the court directed the formation of The Ad Hoc Committee of Corn Suppliers to consist of corn growers from each of the six states where VeraSun has outstanding contracts. This committee will work with VeraSun to review its contracts for acceptance or rejection, but suppliers have to apply for the review.
"I think (VeraSun's local ethanol plants) are doing everything they can to honor their contracts," Edwards said.
The Fort Dodge plant has been honoring its contracts since the company filed for bankruptcy protection last October.
"But the farmer's best option," Edwards said, "is to get a lawyer and get everything in writing and renegotiate their contracts with the local plant."
He said it would be in VeraSun's best interest to renegotiate and not turn down a reasonable contract offer. "They need to maintain good will with farmers because they're going to have to do business with them in the future."
Steve Moline, a lawyer with the Iowa attorney general's office, said some corn contracts have already been rejected for plants that have been shut down or have had their initial startup delayed as the company works through its financial crisis. Other contracts through Jan. 15 and some through late January 2009 have also been rejected.
Moline said some buyers of ethanol have filed motions in the Delaware bankruptcy proceedings to get a judgment on being released from their contracts. He added that if a farmer applies to the ad hoc committee to be released from a VeraSun contract and does not get a satisfactory reply, he could file a motion within 10 days with the court to review the committee's decision.
The court's decision on Tuesday, according to a statement released by the ICGA, directed VeraSun to "consider the unique circumstances of each particular group of farmers. This included the differences between different states with VeraSun locations."
Grain-handling laws differ from state to state, Moline said.
But there was no word for specific contracts sold for February and March delivery.
Producers, Edwards said in an earlier Messenger interview, ''are trying to make decisions on their (2009) inputs based on their expected income from these contracts.''
Most futures contracts were locked in at above the $6-per-bushel mark.
"The proceedings may move slowly, but we have a great start and respect building from the court," said Edwards. "By banding together, we made sure that individual producer concerns and complexities will be heard by the system.
"There are a number of additional crucial issues for corn growers that may come up in the future as this bankruptcy moves forward and the ad hoc committee, recognized by the court, will continue to play an important role."
Potentially thousands of corn growers from Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and other states could be affected by the bankruptcy proceedings.
Contact Larry Kershner at (515) 573-2141 or kersh@farm-news.com
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VTwinJim
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12-06-08 12:33 PM
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I'll give you two guesses and one of them is their little spy's are busy deleting poster's comments on this Blog. But then they only really delete mine and maybe one other person's. It's really funny their friends can say anything that they want and us others get the kick. But then I really wouldn't expect anything different from them. They have a bigger then life opinion of them selves and all ways have. Watch they'll delete this one you can bet on it. They can't stand hearing the truth.
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Xdodger76
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12-06-08 7:29 AM
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I Am starting to believe some of u about this paper. In eastern Iowa if ANY form of govt would pull this stunt the newspaper would have them in court so fast it would make your head spin!!!!! What gives Messenger?????
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kaleidoscope
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12-05-08 7:07 PM
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In addition to the amount of the water bill owed, I'd like to see published again the amount spent to provide water service out there.
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Xdodger76
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12-05-08 5:32 PM
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HELLO THE WATER BILL IS PUBLIC RECORD
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