Pending lawsuits won’t affect viability of AgraCity: CEO

Two brothers who own a major Western Canadian supplier of generic crop inputs are refuting reports that the company and associated companies are experiencing financial difficulty.

AgraCity, which distributes and sells generic crop protection products to members of Farmers of North America (FNA), was recently involved in a patent infringement lawsuit with Arysta Lifescience North America.

According to federal court documents, Arysta sought and received a temporary court injunction blocking AgraCity from selling its Himalaya herbicide, arguing that it infringed on Arysta’s patent for Everest herbicide. The court injunction is in place until September 21, 2019, when Arysta’s patent expires.

One of Arysta’s arguments for receiving the injunction was that if it was forced to sue AgraCity instead of getting the injunction it doubts that AgraCity would be able to pay any award of damages because of its financial difficulties.

Arysta detailed that AgraCity is embroiled in a number of lawsuits including one between its two owners, brothers Jason Mann and James Mann.

AgraCity disputed the claim that it would be unable to pay, stating that the company had a fair market value of $40 million in 2016 and annual gross revenues exceeding $30 million in each of the past three years.

In his May 7, 2019 judgment, Federal Court justice William Pentney agreed with Arysta that there was serious reason to doubt whether AgraCity would be able to pay a damages reward.

He said AgraCity’s evidence to the contrary fell short of what was needed to assuage those concerns because it failed to show what the company’s profits have been.

Jason Mann, president and chief executive officer of AgraCity, said in order to defeat Arysta’s argument AgraCity would have had to supply “voluminous financial information” including sales, input costs, margins, overhead and other sensitive items.

“AgraCity opted not to provide that type of financial information in the Arysta case because it did not want its competitor to have this information,” he said in an email.

Jason Mann AgraCity remains a healthy company.

“AgraCity is enjoying the best year we have had in our 12 years of operation,” he said.

Sales volumes are expected to exceed the previous year by 30 percent.

“AgraCity is thriving and is likely one of the fastest growing companies in the Canadian agriculture industry,” said Mann.

The two brothers are in dispute about the ownership of AgraCity. According to court documents, AgraCity is jointly owned by Jason Mann and James Mann with each brother owning half of the company.

James Mann said his brother is claiming total control of AgraCity and that he is out-of-the-loop regarding the operations of the company.

Jason Mann said he has been managing all commercial operations of the company since 2006 but insists that his brother James still owns 50 percent of AgraCity.

“James and I have some disagreements over AgraCity, which I hope we can work out, but they won’t affect customers,” he said.

The court documents say Jason Mann owns NewAgco Inc., which holds registrations for generic crop protection products. That ownership claim is being disputed by James Mann.

FNA is soley owned by James Mann.

AgraCity is being sued for $2.7 million by one of its suppliers, FMC Canada. The federal court documents also say a claim has been filed by Concorde Group Corporation, which leases a warehouse to AgraCity.

The documents say Jason Mann owes the Canada Revenue Agency $750,000 and that there are other liens and claims against both brothers regarding their personal property.

Jason Mann said FMC’s claim is unproven and the amount claimed is immaterial considering the annual sales volumes of AgraCity.

He said Concorde is not suing the company and AgraCity does not own Concorde any money.

He acknowledged he has a balance owing to the CRA but it is a personal matter unrelated to AgraCity and the amount is under appeal. There are no other claims, liens or judgments against his personal property.

James Mann, who is the public face and registered owner of FNA, said he has not been made privy to any details of the court cases involving AgraCity.

“I and FNA are extremely concerned about the findings of the judge in that (Arysta) case,” he said in an email.

He said he could only comment on the financial well-being of FNA.

“Like everyone in the agriculture sector, FNA is experiencing challenges. FNA is well positioned and along with its excellent staff will prevail through these tough economic times. We will continue to exist to provide benefits to FNA’s farmer members,” said Mann.

He said FNA is committed to ensuring AgraCity meets the requirements of its members.

“FNA will continue to do our very best on behalf of members to ensure that product required and ordered by its members will be provided to farmer members going forward,” said Mann.

Jason Mann said there is nothing to worry about on that front.

“We wouldn’t take the order if there was any doubt that we’d be able to deliver. The 2019 pre-sales have already been delivered and new sales will continue to be delivered over the coming weeks,” he said.

He noted that the company introduced over 60 new crop protection products last year and plans to launch an additional 20 products soon.

AgraCity has invested over $20 million in product development and registrations, including data compensation to multinational companies.

Mann estimates farmers will save $15 million this year buying generics through AgraCity instead of going through mainstream retail channels.

James Mann said economic difficulties in the farm community make FNA’s services even more vital to the farm community because of its ability to supply low cost inputs.

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