Some stories create more questions than answers. Such was the case with 2012 Top Producer of the Year finalist Mike Stamp. In November, Stamp Farms had filed for Chapter 11 bankruptcy. In December, Wells Fargo (the largest secured creditor who is owed $60 million) filed an ominous injunction that alleged massive grain fraud, but later withdrew that motion. What exactly was going on, and what would become of the prime Michigan farmland Stamp had been farming?
Recently, several critical court proceedings and documents have occurred that help to answer some of these questions.
On January 16, Boersen Farms, Inc., filed what is called a "stalking horse" bid for $22.8 million on the farmland. This constitutes an official offer that prevents other bidders from lowballing the purchase price. That bid put in motion a series of relatively rapid movement on the proceedings. Other bidders had to have submitted packages due by Feb. 1, with the auction occurring just four days later.
Boersen’s was the only bid at the Feb. 5 auction, and the courts approved it soon after. Dennis Boersen was not immediately available for comment, but locals are hopeful he is capable of getting the acres back into production.
"The Boersens are well-known and highly respected in this area, so if anyone can make this work, those guys should do it," notes Brian Smith with Centreville's LTA Group.
Additionally, Northstar Grains was not a part of the purchase and continues to operate independently of Stamp Farms at this time. The road back to "business as usual" will be a long one, but hope endures that the first steps have been taken.
Even so, the amount of creditors and other variables will make Stamp’s continuing Chapter 11 case a daunting one, according to agricultural law experts.
"With a Chapter 11 filing, the matter is really in the hands of the Bankruptcy Court," notes Neil Harl, co-owner of the Agricultural Law Press. "Judging from the amount of debt of record, it is relatively unlikely that the case will escape Chapter 7 status eventually. The outcome depends essentially upon the standing of the various creditors including the landowners in terms of being secured or unsecured creditors and the amount of collateral backing the claim."
In Chapter 11 bankruptcies, the focus is on reorganization. Chapter 7 bankruptcies, in contrast, focus on liquidation.