Attorney Joe Pieffer represented farmers who invested in VeraSun Energy, a company that had three Nebraska ethanol plants before filing for bankruptcy protection in 2008.
Pieffer says investors need protection and the Bankruptcy Venue Reform Act of 2018 would help.
“Who knows when we’re going to have another ethanol company file bankruptcy, but we all remember the VeraSun bankruptcy that affected the whole Midwest,” Pieffer says. “They had 23 plants in six Midwestern states and they filed in Delaware. Farmers ought to be able to go to court close to where they do business with the company and not be stuck going to Delaware where there aren’t any ethanol plants.”
Pieffer says companies that file for Chapter 11 protection shouldn’t be allowed to seek court venues other than where their investors are located.
“We ought to have access to justice and easy access to justice,” Pieffer says. “Instead of letting companies make it difficult for the people they’ve done business with to participate in the bankruptcy, it works a lot better if we can make them file bankruptcy either where their primary assets are or where their headquarters are.”
Peiffer says the Commercial Law League of America did a study of bankruptcies filed in Delaware.
“From 2003 to 2016, 735 bankruptcies were filed in Delaware where the companies weren’t doing any business there,” Pieffer says. “Maybe they had an affiliate that was incorporated there and everybody else followed suit. We’ve got companies out in California filing bankruptcy in Delaware.”
That practice makes it difficult for practically everyone who will be impacted by the bankruptcy.
“You’ve got the retirees who might have their pensions affected having to trek out to Delaware to deal with things,” he says, “or you’ve got farmers who were involved with a company like VeraSun was going to Delaware.”
VeraSun had Nebraska facilities in Albion, Central City and Ord. Peiffer works for Ag and Business Legal Strategies based in Hiawatha, Iowa.
By Jerry Oster, WNAX, Yankton