Judge calls Input Capital contracts ‘unconscionable’

[RTK]

If you inked the deal you honour the deal. Seems pretty simple to me...

[recapped]

ICC sees it like this.


Input Capital Corp. Awarded $4.4 Million Plus Interest and Court Costs in Court Decision

News provided by
Input Capital Corp.

May 18, 2018, 14:30 ET

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REGINA, May 18, 2018 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) announces that yesterday, the Saskatchewan Court of Queen's Bench awarded Input a judgment for $4.4 million, together with interest and court costs, in a matter relating to a streaming contract on which a farmer in SE Saskatchewan defaulted.

The court also ruled in Input's favour on a number of issues which have been alleged in recent media reports. The court also ruled that:

The streaming contract with the farmer was not a partnership;
The Cost of Credit Disclosure Act does not apply;
There was no requirement for Input to be licensed under the Trust and Loans Corporations Act;
The Unconscionable Transactions Relief Act does not apply because the contract was not a loan;
Input did not breach any of its contractual obligations to the client; and
The client was unjustly enriched by the default, and should be required to pay Input.

While Input achieved success in the case, the court did make certain findings that Input believes to be in error. Input is considering an appeal of these findings.

ABOUT INPUT

Input is an agriculture commodity streaming company with a focus on canola, the largest and most profitable crop in Canadian agriculture. The Company has developed several flexible and competitive forms of financing which help western Canadian canola farmers solve working capital, mortgage finance and canola marketing challenges and improve the financial position of their farms. Under a streaming contract, Input provides capital in exchange for a stream of canola via multi-year fixed-volume canola purchase contracts. To a farmer, Input is like a virtual grain company, buying canola and providing financial solutions. To canola buyers, Input is like a large virtual farm which produces and sells canola over a large geographically diverse footprint, but does not own the land, or equipment or operate the farm. In production terms, Input is the largest canola farm in the world.

Input plans to continue to grow and diversify its low cost canola production profile by entering into streaming contracts with canola farmers across western Canada. Input is focused on farmers with quality production profiles, excellent upside yield potential, and strong management teams.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

[farmaholic]

Recapped.....does that stand for going over the facts or being recapitalized?

[recapped]

Page 93 & 94 paragraph 218 to 222.


https://static.producer.com/wp-content/uploads/2018/05/18132207/QBG-2120-of-2015-Input-Cap-Gustafson.pdf#_ga=2.239956230.445216775.1526672844-779100769.1514993935 https://static.producer.com/wp-content/uploads/2018/05/18132207/QBG-2120-of-2015-Input-Cap-Gustafson.pdf#_ga=2.239956230.445216775.1526672844-779100769.1514993935

I think Mr Gustafason entered this contract with the intention to not ever deliver towards the contract.

[the big wheel]

ICC sees it like this.


Input Capital Corp. Awarded $4.4 Million Plus Interest and Court Costs in Court Decision

News provided by
Input Capital Corp.

May 18, 2018, 14:30 ET

Share this article

REGINA, May 18, 2018 /CNW/ - Input Capital Corp. ("Input" or the "Company") (TSX Venture: INP) (US: INPCF) announces that yesterday, the Saskatchewan Court of Queen's Bench awarded Input a judgment for $4.4 million, together with interest and court costs, in a matter relating to a streaming contract on which a farmer in SE Saskatchewan defaulted.

The court also ruled in Input's favour on a number of issues which have been alleged in recent media reports. The court also ruled that:

The streaming contract with the farmer was not a partnership;
The Cost of Credit Disclosure Act does not apply;
There was no requirement for Input to be licensed under the Trust and Loans Corporations Act;
The Unconscionable Transactions Relief Act does not apply because the contract was not a loan;
Input did not breach any of its contractual obligations to the client; and
The client was unjustly enriched by the default, and should be required to pay Input.

While Input achieved success in the case, the court did make certain findings that Input believes to be in error. Input is considering an appeal of these findings.

ABOUT INPUT

Input is an agriculture commodity streaming company with a focus on canola, the largest and most profitable crop in Canadian agriculture. The Company has developed several flexible and competitive forms of financing which help western Canadian canola farmers solve working capital, mortgage finance and canola marketing challenges and improve the financial position of their farms. Under a streaming contract, Input provides capital in exchange for a stream of canola via multi-year fixed-volume canola purchase contracts. To a farmer, Input is like a virtual grain company, buying canola and providing financial solutions. To canola buyers, Input is like a large virtual farm which produces and sells canola over a large geographically diverse footprint, but does not own the land, or equipment or operate the farm. In production terms, Input is the largest canola farm in the world.

Input plans to continue to grow and diversify its low cost canola production profile by entering into streaming contracts with canola farmers across western Canada. Input is focused on farmers with quality production profiles, excellent upside yield potential, and strong management teams.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

If this isn't a loan then what is all he additional cost to
The farmer for?
If no loan then thenplay is about getting a farmers canola and making money off of trading and speculating isn't it? That's how it's being sold isn't it?
If you get 10 dollars from icc and have to pay back 15 worth of canola what is the cost for then? If not a loan you should only pay back 10 worth of canola in the future? Or no?

[farmaholic]

When you read dribs and drabs of the link provided by recapped, you have to wonder if there is any canola market distortion with the actions of ICC.

Wouldn't the GrainCos like a single huge supplier, rather than dealing with a bunch of tight fisted farmers?

And all I see ICC as, is a middle man between me and the market, one more hand in my pocket.

I said to someone, ICC has a "certain type" of client.........I don't fit that casting mold. Every morning I will only wake up the Sandbox Farmer from the Slum of the Ghetto.

[hobbyfrmr]

I think ICC uses the word “progressive” frequently.

[LEP]

Ok. Recap so I read the judgement. It finds Gustafson owes $4.4m instead of $7.5m claimed.

There was something about this that was familiar. Then I remembered that Nystuen ran spudco for the NDP. He made an agreement with several farmers to buy seed potatoes and walked on the contracts of the farmers that had the least resources to sue. When the market evaporated.

There was something there about not explaining all the details of the contract either.

[farmaholic]

Be sure to drop by their booth at Farm Provress Show or Ag in Motion for your free "bail pail"

[farmboy44]

ICC has announced today they will appeal this decision (to no ones surprise)

Meanwhile, their stock hit an all time low today.

Fun times to be around that board table lately.

[Crestliner]

Yes they will appeal...and watch who will ask to get intervenor status....John Deere Finance , CNH Capital, all the Input Finance suppliers...everyone who has been charging the farmer 18-20% interest on a late or overdue payments. This judge has seen enough of farmers getting screwed over by Finance companies taking advantage of interruptions in a farmers cash flow because events beyond control and not able to make payments on time. Ie: like no grain movement, high prices contracts not moving.

I’m not saying all farmers that fall behind are victims....but a lot are and the Finance companies line their pockets with the extra payday when stuff happens. A better idea would be to charge a more acceptable rate in the single digits if a farmer falls behind. I don’t know any farmwr who has one chance a year to make money would agree to pay 18%.

Input had a good idea, forward price some canola, get paid an advance....but to base it off 18% interest is a fools game. And shame on the Banks for not competing. These farmers had to have free land in order to play with Input. Why would any Bank who had a farmer client who needed money so desperately would have a farmer resort to such crazy interest rates if the Bank was not interested in making something work.

It’s a small number. 300 farmers or less. Input is done. They should just get their farmers to pay what was lent to them plus a reasonable interest rate and wrap it up. If the farmer can’t pay that which was lent plus a reasonable interest, then Input can realize on their security.

Appeals will make the lawyer richer! The outcome will stay the same. Just wrap it up and try something else. Your model dosent work and your brand is damaged beyond repair.

[farmaholic]

Is "USURY" illegal in Canada? I guess not in all cases.

That "brand" needs to be broken. But I still don't understand who in their right mind would use their services....if the guy is drowning you don't throw him a lead life jacket.

Edit....or worse yet, reach out for it!