Bankruptcy won't affect co-ops, board member says
By ROWENA PLETT
Staff reporter
It was announced Monday that Farmland Industries, Inc., based in Kansas City, Mo., has filed for chapter 11 bankruptcy. The area farm co-operatives are members of Farmland Industries.
Lyman Adams, manager of Cooperative Grain and Supply, based at Hillsboro, is a board member of Farmland Industries. He said the decision to file for bankruptcy was difficult.
He hastened to assure co-op members that local units of operation are not affected directly by the bankruptcy.
"Each local co-op is a legal entity separate and distinct from Farmland Industries," Adams explained. "Each co-op's operations and financial strength are separate from Farmland."
He said the biggest concern for co-ops is the long-term value of the equity they have in Farmland stock. Co-ops have accumulated stocks which have been pro-rated to members of Farmland Industries as their share of the profits throughout the years.
Therefore, according to its financial situation, each co-op will be affected differently.
He said the bankruptcy does not apply to the various alliances that have been formed with Farmland Industries and other entities in relation to marketing, fuel, and fertilizer.
He said the bankruptcy involves Farmland Industries and four of its subsidiaries: Farmland Foods, Inc., Farmland Pipeline Co., Farmland Transportation, Inc., and SFA, Inc. (a retail operation inherited through a merger).
Adams said he received a report Monday that all Farmland businesses are operating as usual. Farmland will undergo restructuring in the coming months.
