Newco Grain hijinks

[bucket]

I don't know how any grainco after a few months in operation can't stroke a cheque upon delivery.....they all make money...

[jdepape]

Did their bond actually cover the 95% the CGC paid out?

Or does the CGC ever have to dip into a bond pool/reserve or do they ONLY use the defaulted companies bond?

Ultimately...if people got 100% of their money good on NEWCO for making it right. Religion or not.

Only the defaulted company's bond is used. There's no pool.

[checking]

Newco's security through it's bond was able to pay 95% of each claim. If claims had been higher, the percent would have been lower as CGC prorates to bond available. Newco president/owner promised by letter to claimants that he had every intention to make the farmers 100% whole. It took awhile, truly did not expect it, but the 5% shortfall arrived, and did not bounce like the original cheque. I can not say it any more clearly.

[farmaholic]

Checking dePape, thank you for clarification.

Edit in, I guess the next(probably the first) question would be is it worth the risk doing business with them for the first time or giving them another chance if you already done business with them.

I can honestly see how these Cos get in trouble if they are speculating and end up on the wrong side of the market or they themselves get defaulted on by their buyer or ship product that gets rejected and is sitting in a port in some foreign country and they need to find a new home for it....at possibly at a reduced price because they just lost their bargaining power.

....all of which should not be the primary producer's problem.

[bigzee]

Sold to them years ago got the phone call they were tits up. Ended up having to do a bunch of paper work to prove I actually sold to them, paper work which they all ready had. I got paid 95% months later, then a year later got a cheque for the remainder. Was shocked to get the last 5%.
Will never deal with them again.

[Ronski]

I have sold to Newco in the past and will do so in the future. They at least had the personal integrity to make things right when the law said they could walk on the 5%. I like to think I would do the same if the situation arose.
No idea why they had issues in the past (management, speculating, rejected cargo?) But they stood up and did what was right.

[helmsdale]

As far as I'm aware, they have changed their business model up. Instead of you recieving a cheque from Newco Commodities, they are simply a middle man that takes a $x.xx/bu commission now like many others. So now its not them that you need to worry about regarding the cheque, it's each individual buyer they are dealing with.

My memory is a little hazy on the matter as it was a while ago, but i believe they sunk themselves by signing a delivery contract with the CWB of significant tonnage for just into the open market period, and prices spiked hard and they had to either buy out their contract, or fill it at a significant loss.

Maybe someone else has better info than I do, but that's what seems to stick with me. It was rumored to be a one time loss in the millions. Honestly thought it was going to be impossible for a company to soak up with minimal assets, and thin margins, but one guy i know who sold a load of off spec canola to them just shortly before shit hit the fan, recieved $0.10 on the dollar initially, but something like 3 years later was finally made whole.

[hobbyfrmr]

Thats good news. I appreciate the update. Human nature in me remembers negative events then never follows through to see what happened later.

[farmaholic]

As positive as the outcome may have been was there any compensation for stress pain and suffering and being short the cash flow to srevice your own business and life?

...just playing the Devil's Advocate now.

[bucket]

Zero interest on those payments .....pretty good loan newco got...