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UMB Bank Pressures Debtor to Take Farmers’ Grain Without Payment, Says Class Action

This class action is brought by Mississippi farmers against UMB Bank, NA, alleging that it propped up Express Grain Terminals and pressured it to take farmers’ grain during the fall harvest, so that the farmers were not paid for the grain. The complaint alleges that UMB understood Express Grain’s financial situation and took advantage of that knowledge to gain more collateral for itself, at the expense of the farmers.

The class for this action is all persons and entities who deposited agricultural products with Express Grain and who did not receive payment for those products, between January 1, 2020 and October 31, 2021.

Express Grain buys and stores grain from Mississippi farmers and sells it in the market. Farmers would deliver grain to Express Grain; Express Grain would weigh and inspect the grain, then deliver a check for pay for it. The season, for corn and soybeans, runs from late August through October.

Express Grain made optimistic statements about its financial condition in 2021. But the complaint alleges that Express Grain had “massive amounts of debt[,]” and that UMB was its main creditor.

The complaint claims, “Virtually all of [Express Grain’s] assets were collateralized,” with the most valuable asset being the grain it held. Express Grain had a revolving loan with UMB, and the amount it could borrow under this loan “was determined in part by the amount of its grain inventory.” This inventory was at its height at the end of the harvest season.

UMB knew that Express Grain was in financial distress throughout 2021, the complaint alleges, since Express Grain’s financial condition had been deteriorating for a long time, it was in violation of provisions of its loans, and its financial statements had been late since 2018. In its December 2020 financial statement, the complaint alleges that “upon information and belief, the auditor determined that there was substantial doubt about Express Grain’s ability to continue as a going concern…”

By spring 2021, Express Grain was insolvent, the complaint says, “and being kept alive only by the forbearance of the Bank. The Bank was aware that if it called the loan then, there would be little grain it could claim as security for Express Grain’s debt.” It was also aware, the complaint claims, “that if it called the loan in late September in the height of the harvest season for corn and soybeans, the Express Grain elevator would likely be filled with grain upon which it could claim a priority lien.”

The complaint alleges, “In short, the Bank laid a trap for [the farmers], a trap to steal their crops and use those crops to satisfy the massive loan it had improvidently made to Express Grain.”

The complaint alleges that the only beneficiary of the farmers’ grain deliveries was UMB Bank. The Bank filed a receivership petition against Express Grain on September 28, 2021, while Express Grain filed a petition for bankruptcy the following day.

The counts include aiding and abetting fraud and conversion, among other things.

Article Type: Lawsuit
Topic: Conversion

Most Recent Case Event

UMB Bank Pressures Debtor to Take Farmers’ Grain Without Payment, Says Complaint

November 8, 2021

This class action is brought by Mississippi farmers against UMB Bank, NA, alleging that it propped up Express Grain Terminals and pressured it to take farmers’ grain during the fall harvest, so that the farmers were not paid for the grain. The complaint alleges that UMB understood Express Grain’s financial situation and took advantage of that knowledge to gain more collateral for itself, at the expense of the farmers.

UMB Bank Pressures Debtor to Take Farmers’ Grain Without Payment, Says Complaint

Case Event History

UMB Bank Pressures Debtor to Take Farmers’ Grain Without Payment, Says Complaint

November 8, 2021

This class action is brought by Mississippi farmers against UMB Bank, NA, alleging that it propped up Express Grain Terminals and pressured it to take farmers’ grain during the fall harvest, so that the farmers were not paid for the grain. The complaint alleges that UMB understood Express Grain’s financial situation and took advantage of that knowledge to gain more collateral for itself, at the expense of the farmers.

UMB Bank Pressures Debtor to Take Farmers’ Grain Without Payment, Says Complaint
Tags: Aiding and Abetting Fraud, Constructive Trust, Conversion