South Dakota Farmers Unite for Legal Fight With VeraSun

Thousands of farmers who did business with the now-bankrupt VeraSun Energy are now facing a pending legal fight.

The former ethanol company sent out settlements in August, but tonight hundreds of farmers are grouping together, trying to figure out how to defend themselves against VeraSun.

One letter. Sent out to thousands of farmers. That's why the banquet room in the downtown Holiday Inn is packed.

"We received a letter about a week and a half ago. It came in a plain white envelope. It didn't look like anything important," said Conrad Schardin, who farms in Lake Benton, Minnesota.

The letter Schardin and so many others received is actually a settlement offer from VeraSun lawyers. The settlement is asking the farmers for an 80% repayment of what VeraSun paid them for their corn in 2008, 90 days before the former ethanol company filed for Chapter 11 bankruptcy protection.

"They say we have 30 days to respond. If we don't respond by that they could take us over back to New York or wherever this law firm is at," said Schardin.

A few lawyers from Sioux Falls, the executive Director of the South Dakota Corn Grower's Association and a representative from the state department of agriculture are all here to help the farmers organize their effort and avoid having to deal with this on their own.

"What we're trying to do is organize so we have limited legal fees," said Lisa Richardson, Executive Director of the South Dakota Corn Grower's Association.

"At this point it's just a matter of making sure they get proper counsel. That they do in fact respond to the letters," said Dale Blumanhourst, Director of Agricultural Development for the South Dakota Department of Agriculture.

People from Iowa, Nebraska and North Dakota all received the same thing.

"I'm not sure the exact number, but it's huge," said Blumanhourst.

So these lawyers and department officials are talking to their counterparts around the midwest, hoping to take care of this issue together. They say asking for repayment is normal in bankruptcy proceedings.

"I understand it's a legal course they can take. I don't consider it ethical, but it is legal," said Richardson.

Despite this potential legal battle, Schardin says VeraSun was a good company to do business with.

"This has just got druggen into some legal bureaucracy that I don't think is right, but that's the way bankruptcy court works and we have to figure out a way to work through it," said Schardin.

In the meantime, they're all getting to know the bankruptcy process a little better than they'd like to.

A phone conference between the two sides is scheduled for Monday morning. The South Dakota Corn Grower's Association won't get involved in the case, but they are offering information and helping farmers line up legal help.

source: kdlt