Some will see this as not commodity related; but what do they know.
Even though there has been no public announcement (that I am aware of); the Federal Government has cut cheques for slightly over 95% of the amounts due to eligible producers for unpaid Newco Grain deliveries. This results in nearly a 5% shortfall.
Some accountants are reported to have advised that cashing these government cheques is a release of any further claim against the contracts entered into between the producer and Newco.
I have checked with the CGC, who of course says to consult with your own lawyer; but I am advised by the CGC that information provided before the issuance of the goverment cheques was to inform producers of the bond claim paid by Atradius and the security held by the CGC. I understand from the CGC that the information provided has no bearing on the bond insurers and other unsecured creditors(farmers) other options. Producers are not "signing off" or accepting as `full payment by cashing the Federal Government cheques.
That's an important point that everyone; including those with their heads deeply in the sand, should fully realize.
Further; the 120 some odd unsecured farmers; are not being involved in first round negotiations which are apparently in progress with Atradius (presumably for some sort of bond repayment settlement in the order of perhaps $2M.`) Those figures come from CGC information provided to each eligible producer; which works out to an approx. two-thirds portion as being noted by the CGC to be a possible future claim Atradius may make against the insured company. Past information has been that there was a 3 million total bond claim "collapse" and all available estimates and information keep coming out to $2M out of the pockets of the bonding company, and $1M from CGC security held.
Consider that while Atradius may be the largest unsecured creditor; farmers still are uncontestably owed 5% or about $150,000. One very accepable solution for farmers would be for Atradius to pay out those 120 producers; and negotiate for whatever $2.15M settlement they can arrive at. That would tremendously simplify the great bulk of outstanding claims; but I realize there are truckers; brokers and others out of pocket. I also know that at least some token payments have been made to some of those businesses; and it only makes sense that agreements have been made with whom a a still active company need to conduct ongoing business.
I would strongly hope that the 120 some farmers could come together behind such a suggestion.
On the other hand; one must be pragmatic enough to know that only 1% will note the suggestion; two thirds are philosophically opposed to everything and 0.1% would get off theirs asses in time.
What I do know is that each and every one of those 120 (including myself) is having the important first round being done in our absences; despite asking for the same financial and business information that the few big boys are discussing.
At the end of the day, or end of next week in this case; the done deal is planned to be put to the rest of those affected. Considering the average age of farmers; I predict there will be a lot of estates involved; or more likely a totally different outcome that invoves a much more common outcome.
The above events have obvious parallels with the CGC being in total control of the licencing and bonding process currently in place. The CGC and the Government of Canada should be held fully responsibile for ensuring an adequate bond in the first place. That didn`t happen; and continues to be overlooked. All we need do is demand the Federal Government treat us as they demand from us in terms of penalties, interest incarceration and full payment.
And we all know now that this CGC Federal agency, with all their compliance officers and auditor teams didn't have adequate security in place. What makes anyone think Atradius and the insured will pay out any substantial portion of the rest of amount owed to farmers when farmers aren't anywhere close to the table.
I am suprised/not suprised that neither Agriville; the press; newsletters; and public talk has attracted any substancial debate. The real big picture is that this story, or one identical to it, will involve a different set of producers; who are equally uninformed about the stabilty of any grain purchaser; anywhere in the world. Thus Newco should not be singled out ; and may indeed be an example of the "best" of a very very bad lot in the agricultural marketing industry.
And I am not impressed by the next solution which is liable to be a producer fee of 1% of the insured sale; in order to get a guaratee of a 90% return. Hell I got 95% back frmo the bonding process and am not nearly satisfied. The new insurance program suggestion guarntees at least double that loss.
And for the respondents who willclaim that 95% is a way better than nothing; just keep being satisfied with 5% losses of pure profit and you will confirm beyond doubt why such farmers are such poor business men.
Even though there has been no public announcement (that I am aware of); the Federal Government has cut cheques for slightly over 95% of the amounts due to eligible producers for unpaid Newco Grain deliveries. This results in nearly a 5% shortfall.
Some accountants are reported to have advised that cashing these government cheques is a release of any further claim against the contracts entered into between the producer and Newco.
I have checked with the CGC, who of course says to consult with your own lawyer; but I am advised by the CGC that information provided before the issuance of the goverment cheques was to inform producers of the bond claim paid by Atradius and the security held by the CGC. I understand from the CGC that the information provided has no bearing on the bond insurers and other unsecured creditors(farmers) other options. Producers are not "signing off" or accepting as `full payment by cashing the Federal Government cheques.
That's an important point that everyone; including those with their heads deeply in the sand, should fully realize.
Further; the 120 some odd unsecured farmers; are not being involved in first round negotiations which are apparently in progress with Atradius (presumably for some sort of bond repayment settlement in the order of perhaps $2M.`) Those figures come from CGC information provided to each eligible producer; which works out to an approx. two-thirds portion as being noted by the CGC to be a possible future claim Atradius may make against the insured company. Past information has been that there was a 3 million total bond claim "collapse" and all available estimates and information keep coming out to $2M out of the pockets of the bonding company, and $1M from CGC security held.
Consider that while Atradius may be the largest unsecured creditor; farmers still are uncontestably owed 5% or about $150,000. One very accepable solution for farmers would be for Atradius to pay out those 120 producers; and negotiate for whatever $2.15M settlement they can arrive at. That would tremendously simplify the great bulk of outstanding claims; but I realize there are truckers; brokers and others out of pocket. I also know that at least some token payments have been made to some of those businesses; and it only makes sense that agreements have been made with whom a a still active company need to conduct ongoing business.
I would strongly hope that the 120 some farmers could come together behind such a suggestion.
On the other hand; one must be pragmatic enough to know that only 1% will note the suggestion; two thirds are philosophically opposed to everything and 0.1% would get off theirs asses in time.
What I do know is that each and every one of those 120 (including myself) is having the important first round being done in our absences; despite asking for the same financial and business information that the few big boys are discussing.
At the end of the day, or end of next week in this case; the done deal is planned to be put to the rest of those affected. Considering the average age of farmers; I predict there will be a lot of estates involved; or more likely a totally different outcome that invoves a much more common outcome.
The above events have obvious parallels with the CGC being in total control of the licencing and bonding process currently in place. The CGC and the Government of Canada should be held fully responsibile for ensuring an adequate bond in the first place. That didn`t happen; and continues to be overlooked. All we need do is demand the Federal Government treat us as they demand from us in terms of penalties, interest incarceration and full payment.
And we all know now that this CGC Federal agency, with all their compliance officers and auditor teams didn't have adequate security in place. What makes anyone think Atradius and the insured will pay out any substantial portion of the rest of amount owed to farmers when farmers aren't anywhere close to the table.
I am suprised/not suprised that neither Agriville; the press; newsletters; and public talk has attracted any substancial debate. The real big picture is that this story, or one identical to it, will involve a different set of producers; who are equally uninformed about the stabilty of any grain purchaser; anywhere in the world. Thus Newco should not be singled out ; and may indeed be an example of the "best" of a very very bad lot in the agricultural marketing industry.
And I am not impressed by the next solution which is liable to be a producer fee of 1% of the insured sale; in order to get a guaratee of a 90% return. Hell I got 95% back frmo the bonding process and am not nearly satisfied. The new insurance program suggestion guarntees at least double that loss.
And for the respondents who willclaim that 95% is a way better than nothing; just keep being satisfied with 5% losses of pure profit and you will confirm beyond doubt why such farmers are such poor business men.
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