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KANSAS CITY — Farmland Industries estimates it will pay unsecured creditors up to 17 percent more than initially estimated, according to Farmland’s Second Amended Disclosure Statement filed recently with the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City. The statement increased Farmland’s distribution estimate to its unsecured creditors and subordinated bondholders to 60-82 percent. In July, Farmland had estimated a range of 50-65 percent. The Second Amended Disclosure Statement recognizes company developments since the initial document was filed on July 31. The distribution estimates listed in the updated document include: — Farmland Industries secured lenders – 100 percent — Farmland Industries administrative and priority Claims – 100 percent —Farmland Industries demand loan certificates – 100 percent — Farmland Industries convenience claims (less than $1000) – 100 percent — Farmland Foods general unsecured (trade) creditors — 100 percent — Farmland Industries general unsecured (trade) creditors – 60-82 percent — Farmland Industries subordinated bondholders – 60-82 percent. Farmland President and CEO Bob Terry said, "The increased recovery estimate for Farmland Industries’ trade creditors and bondholders reflects the hard work and dedication of Farmland employees. Their efforts have allowed Farmland to continue to generate strong cash flow from operations. We have now generated in excess of $75 million from operations since our filing and have realized strong values in the sales of core company assets. We are very pleased to announce these increased recovery estimates, which are a direct result of the unwavering commitment of Farmland employees." Farmland received preliminary court approval of the disclosure statement in September, telling the court it would provide more detail as asset sales were finalized. The latest statement reflects the sales process for Farmland Foods at a court-supervised auction last month. Overbids resulted in additional value of $90 million to the Farmland bankruptcy estate. In addition, final court approval of the sale of Farmland Foods to Smithfield Foods brought Farmland $480 million in value. A copy of the Second Amended Plan of Reorganization, Second Amended Disclosure Statement and a ballot were to be mailed to Farmland creditors, who will be asked to accept or reject the plan. If creditors accept the plan, Farmland anticipates completing its reorganization and making its initial distribution to creditors once the plan becomes effective. In addition to a reorganized Farmland entity, a trust will be established to manage the remaining assets and to extract the best value for the creditors. The company’s remaining major assets include grain elevators throughout the Midwest, and ownership interests in Agriliance (a fertilizer marketing partnership with CHS Cooperatives and Land O’Lakes), and Land O’Lakes Farmland Feed (a feed manufacturing and distribution company). The company also owns a fertilizer plant and refinery at Coffeyville, Kan., and a 50 percent interest in SF Phosphates, a phosphate fertilizer venture. Letters of intent to sell these assets have been approved by the bankruptcy court. The full text of both the Second Amended Plan of Reorganization and Second Amended Disclosure Statement will be available at www.bmccorp.net/farmland. |
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