2012-03-07 / Front Page

Archbold Elevator Remaining Assets Divided March 1

by David Pugh
Buckeye Staff Writer

The remaining assets of Archbold Elevator were divided among secured creditors during a hearing Thursday, March 1, in Fulton County Common Pleas Court.

Under an agreement worked out between attorneys, The Andersons, Maumee, will receive the lion’s share of the remaining pot of about $4.9 million from the sale of assets of Archbold Elevator and its related businesses.

The Andersons, a large grain-trading firm, will receive about $4.65 million, shy of the firm’s full claim of more than $4.8 million.

The financial collapse of Archbold Elevator began in April 2011, when the Ohio Department of Agriculture suspended the firm’s grain handling license, essentially shutting down the business.

A routine ODA inspection of Archbold Elevator records revealed problems with the company books, and grain stored at Archbold Elevator was 50,000 bushels short of what company records indicated should be on hand.

The following day, Farmers & Merchants State Bank, Archbold, filed a lawsuit against the elevator and company owner Bill Fricke, demanding repayment of more than $4.9 million.

F&M received a $4 million payment in October 2011, followed by another approximately $1.9 million in December 2011.

The $5.9-million amount included interest and penalties against Archbold Elevator, but F&M agreed to reduce its final settlement by about $75,000.

Secured

The Andersons was one of six secured creditors in the Archbold Elevator receivership. Others were F&M; D&D Ingredient Distributors, Delphos; Agricultural Products Extension, (APEX) LLC, of Hamburg, N.Y.; the ODA; and Fenstermaker Farms, Leipsic.

A secured creditor is one whose debt is secured by property or a lien against property. If a business is liq- uidated and its assets sold, secured creditors are the first to be repaid. The Fenstermaker Farms claim against Archbold Elevator was resolved when the company purchased some Archbold Elevator assets.

The agreement worked out between lawyers for the secured creditors, Gerald Kowalski, the court-appointed receiver, and an attorney representing Bill and Lynette Fricke, calls for $100,000 to be withheld from the $4.9 million remaining within the receivership.

The money will be used to cover the costs of the final accounting, plus attorney and other fees.

D&D Ingredients will receive $150,000, and agreed to work out an agreement with APEX.

A “litigation trust,” a legal entity, is to be established, which will receive any money coming to the now-defunct Archbold Elevator. That includes money owed to Archbold Elevator from unpaid bills and from other bankruptcy and receiverships.

If the trust receives enough money to fully satisfy the D&D claim against Archbold Elevator, any money beyond that amount will go to the Ohio Department of Agriculture.

Indemnity Fund

The Ohio Department of Agriculture paid out more than $3.4 million to area farmers who had grain stored at Archbold Elevator at the time the firm’s license was suspended.

The money came from the state’s Grain Indemnity Fund, a fund established in 1983 to compensate farmers who lose grain in the fi- nancial collapse of an elevator.

The fund raised money from an assessment on grain transactions.

But the compensation fund does not cover 100% of farmer losses. Reimbursement ranges from 100% to 80%, depending on the agreement between the farmer and the elevator.

ODA said farmers lost about $865,000 as a result of the Archbold Elevator collapse.

One claimant alone lost almost a quarter of a million dollars.

The ODA is now attempting to recover all or part of the money that was paid out of the indemnity fund.

Unsecured Claims

Creditors who are owed money by Archbold Elevator on an unsecured basis will probably have to write off what they’re owed.

A court order filed Tuesday Feb. 21, states, “Since it appears that there will not be any funds to pay unsecured claims, the court will make no determination as to the priority of the unsecured claims."

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