A north central Iowa organic soybean business filed for bankruptcy Monday, saying it owes at least 100 creditors $10 million. It’s the state’s second grain business to run into financial insolvency this year.
The Iowa Department of Agriculture suspended the warehouse and grain dealer licenses of Global Processing Inc. of Kanawha earlier this month, saying the company failed to “have sufficient funds to cover producer grain checks” as well as to file monthly financial statements as Iowa law requires.
The loss of state licenses means Global Processing is no longer able to accept grain in Iowa. The company says online that it process food-grade organic soybeans, with locations in Iowa, Nebraska, Illinois and Minnesota.
More:Iowa farmers caught in grain firm’s bankruptcy can seek to recoup nearly $1.3 million in losses
Global Processing said in its bankruptcy filing Monday that it owes between 100 and 199 creditors from $10 million to $50 million. The company estimated it has the same amount of assets as it has liabilities.
Ron Martin, a Cedar Rapids bankruptcy attorney representing Global Processing, said Tuesday he couldn’t immediately comment as the company works to reorganize under Chapter 11 bankruptcy protections.
The state agriculture department said Tuesday it did not know how many farmers might be caught in the company’s financial troubles. It urged farmers to file claims through a state grain indemnity fund, which may reimburse growers for 90% of their losses up to $300,000.
In August, the department suspended the grain and warehouse licenses of B & B Farm Store in Jesup. The action came after Farmers State Bank, based in Waterloo, filed a petition in Buchanan County District Court seeking to foreclose on the business.
A bankruptcy receiver appointed to the case agreed with the state’s license revocation. An estimated 60 farmers are seeking to recoup nearly $1.3 million from the northeast Iowa grain and feed business.
The Iowa Department of Agriculture oversees the financial solvency of grain dealers and grain warehouse operators to protect Iowa farmers. The Iowa Grain Depositors and Sellers Indemnity Fund was created in 1986 to provide financial protection to farmers with stored grain.
The indemnity fund covers farmers with grain on deposit in Iowa-licensed warehouses and grain sold to state-licensed grain dealers.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at [email protected] or 515-284-8457.