Corn grower issues heard in VeraSun bankruptcy proceedings

JOHNSTON -- The Iowa Corn Growers Association (ICGA), National Corn Growers Association (NCGA), and other corn grower states helped bring about key developments at the VeraSun bankruptcy hearings in Delaware, Tuesday, Dec. 2.

The states together filed a motion to challenge bankruptcy provisions that threaten future corn sales contracts. Ron Litterer, a past ICGA president and current NCGA chairman, said the states working together are serving as a voice for corn growers and advocate for farmer interests.

The first steps in this process took place with the formation of the first and only corn grower 'ad hoc' committee recognized by the bankruptcy court. At the hearing, the bankruptcy judge welcomed the corn grower committee and told lawyers for VeraSun to make sure phone calls from corn growers and their lawyers are answered. In addition, a specific lawyer from VeraSun was assigned to corn grower issues.

"Iowa Corn Growers Association and the other corn states accomplished several key things earlier this week," said Gary Edwards, a grower based near the VeraSun plant in Dyersville and ICGA president. "We are making great strides to create open communication between corn growers, VeraSun and the court. The fact that corn growers from many states and have banded together really impressed the court and other parties in the case."

Key Proceedings:

1. The group led by NCGA successfully filed an objection to the contract with a 10-day notice from VeraSun. The court approved a process for notice on certain forward contracts, but no specific deadline has been outlined at this time. Individual growers and their legal counsel are still encouraged to work with their local VeraSun plant on their unique contract details.

2. Statements presented orally and in written form stressed the complex issues facing farmers in terms of contracts. In response, the court ordered VeraSun to carefully consider the unique circumstances of each particular group of farmers and their unique situations. This included the differences between different states with VeraSun locations.

3. An ad hoc committee representing the interests of all corn growers affected by the bankruptcy was announced and subsequently acknowledged by the court and VeraSun.

4. The committee, with representation from NCGA, and five state grower associations, will serve in an advisory role between the court and corn growers who are or will be affected. The committee will be able to give advice and council on options, rulings, or alternatives. This ad hoc committee, VeraSun, and the court are in discussions on an acceptable timetable for notification of assumption or rejection of contracts through out the entire case.

"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."

ICGA directors and staff are monitoring the VeraSun situation, as it develops in Delaware and here in Iowa, meeting with key officials, and taking steps to keep ICGA members informed of the latest developments.

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.