Court allows rejection of VeraSun contracts
Dec 4, 2008 10:05 AM, From the National Corn Growers Association
The U.S. Bankruptcy Court presiding over the VeraSun Energy Corporation case this week considered concerns of corn growers and suppliers. Legal counsel for an ad hoc advisory committee formed by the National Corn Growers Association, state affiliated organizations, and others participated in the hearing in Wilmington, Del.
As expected, bankruptcy law and the ruling will allow VeraSun to reject any contracts that are economically disadvantageous to VeraSun, including corn growers’ contracts.
“We are happy that the court listened to corn growers’ views,” said Ron Litterer, NCGA chairman and corn grower from Greene, Iowa. “It was doubtful that we could influence the courts to require VeraSun to pay the contracted price for our corn. We believe we did influence other issues of concern to growers.”
NCGA helped form the advisory committee in November to make certain that the views, expertise, and interests of corn growers in the VeraSun case were effectively represented before the U.S. Bankruptcy Court in Delaware. Litterer is a member of the advisory committee, which will continue to serve as a “voice” to the court and to VeraSun on the concerns of corn growers. The committee also will help keep members of NCGA and state affiliates informed regarding the process and activities of VeraSun’s situation. The advisory committee is made up of corn growers from Iowa, Michigan, Nebraska, North Dakota, Ohio, and South Dakota.
“We will continue to advocate for the interests of all corn suppliers and play a role to help make the best of a bad situation,” said Litterer. ”As providers of corn to VeraSun, corn growers want fair payment under fair terms for their corn, as well as a positive conclusion that allows VeraSun to stay viable as a long-term customer for our corn. We believe this is in everyone’s best interests.
“Given the current state of the economy, we recognize there may be additional challenges for large corn customers, such as the bankruptcy filing recently announced by Pilgrim’s Pride Corporation, which may create a ripple effect for our members. NCGA will continue to monitor these situations and play a helpful role, whenever possible,” Litterer said.
