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VeraSun attorneys retract payment demands

Creditors of bankrupt ethanol producer VeraSun Energy have apparently retracted their demands for farmer payments.

Patrick Glover, a Sioux Falls, South Dakota attorney who’s representing some 70 farmers in the dispute, says he received a phone call Thursday morning from a New York-based law firm saying the bankruptcy trustee will not pursue individual farmers.  Glover says he has also talked to attorneys in Iowa and Nebraska who received the same message.  A message left with an attorney for the New York-based law firm was not immediately returned.

The National Corn Growers Association (NCGA) heralded the news.  “This is great news for farmers at a time when we need to focus on bringing in our crops,” said NCGA president Darrin Ihnen. “We’re glad the lawyers saw the light and realized they had no legal justification to go after us.”

Hundreds of Midwest farmers who sold corn to VeraSun in the 90 days before it filed for Chapter 11 bankruptcy protection in 2008 received letters in August telling them they had until September 30^th to replay 80 percent of what VeraSun paid them for their corn. 

In strongly worded correspondence sent Tuesday to the law firms demanding payment, an attorney assisting NCGA insisted that the lawyers withdraw their demands. 

“We believe that many of the foregoing demands were made without any legal and factual foundation and, as such, constitute an impermissible effort to collect alleged debts that are clearly not owing,” wrote attorney David Lander of Thompson Coburn. “They appear to have been made without the inquiry reasonable under the circumstances. Moreover, we believe that the claims asserted in the vast bulk of these letters are not warranted by existing law or a non-frivolous argument for the extension, modification or reversal of existing law or the establishment of new law.”