Turner Grain’s Bankruptcy Takes Toll on Farmers
July 3, 2016, Arkansas – Approximately, two years after Turner Grain, a commodity broker, filed for bankruptcy protection former customers have started receiving preference letters informing them that money they received from the company shortly before the bankruptcy filing may have to be returned. These letters specify that the payments they received within 90-days before the bankruptcy are being reviewed as possibly preferential payments, meaning those funds might have to be paid back. The farmers are perturbed as they cannot pay the amount back because they have probably either lost everything or re-mortgaged everything.
Turner Grain Merchandising, Inc. filed for bankruptcy protection on October 23, 2014. The bankruptcy case is pending before the United States Bankruptcy Court for the Eastern District of Arkansas. The case number for the lead bankruptcy case is 14-15687. The bankruptcy case is currently assigned to United States Bankruptcy Judge Phyllis M. Jones. The law firm of Keech Law Firm, P.A. is acting as lead bankruptcy counsel to Turner Grain Merchandising, Inc. (d/b/a Turner Grain, Inc.) in the bankruptcy case.
The preference statutes are an attempt to achieve equity between creditors. However, there are defenses against the recovery of a preference payment in 11 U.S.C. 547(c). These include: contemporaneous exchanges; payments made in the ordinary course of the business of the debtor and the creditor on ordinary business terms; and subsequent new value to the debtor. These defenses need to be raised in an answer to a preference complaint. The burden of proof lies with the creditor to establish that despite the elements of a preference; the transfer is protected by one or more of these defenses.
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