Judge Approves Sale Of Assets
By Beleaguered Farmland Co-op

KANSAS CITY, MO. —(AP)— A federal bankruptcy judge has told Farmland Industries Inc. it can sell several assets for about $11.1 million.

With U.S. Bankruptcy Judge Jerry Venters' approval last week, Farmland plans to sell some unused fertilizer warehouses in Memphis, Tenn., Greenville, Miss., and Port Lavaca, Texas; a 32-mile segment of petroleum pipeline in southeast Kansas; and farm supply stores in Clarksdale, Miss., and the Louisiana towns of Iowa, Mowata in Acadia Parish, and Minden.

The cooperative also plans to sell inventory from the warehouses and stores, according to bankruptcy filings.

When Farmland — North America's largest farmer-owned cooperative — filed for Chapter 11 bankruptcy protection May 31, it listed $2.7 billion in assets and $1.9 billion in liabilities. Those figures included partnerships of Farmland, such as Farmland National Beef, which are not part of the bankruptcy. The Farmland businesses that are part of the bankruptcy have assets of about $2 billion and liabilities of about $1.5 billion.

Farmland bankruptcy lawyer Laurence Franzen told the court that the co-op no longer needs the assets it wants to sell. Lawyers representing the creditors agreed the assets should be sold.

Farmland negotiated the best deal possible with potential buyers, Franzen told Venters. The co-op also will notify other potential bidders of plans to sell the assets. If Farmland were to receive competing bids, there would be an auction.

Meanwhile, in a letter to employees last week, chief executive Robert Terry sought to dispel rumors that the co-op was considering liquidating to pay off creditors.

In the letter obtained by The Kansas City Star, Terry said that in the absence of a reorganization plan there were "feelings of uncertainty" and rumors inevitably arise.

"The latest rumor circulating is that Farmland is converting from a Chapter 11 reorganization to a Chapter 7 liquidation. This is not true," Terry wrote. "We continue to work toward a plan of reorganization, and our cash flow is meeting our targets."