Farmers seeking compensation for unpaid grain deliveries to a Manitoba hog company may actually have a chance to recover their losses.
On March 12, a Manitoba judge charged with dispersing money from Puratone, which entered creditor protection last fall, decided to set $5 million aside for future claims against the firm’s financial assets.
The decision means that John Sigurdson, who delivered more than $60,000 in feed grain to Puratone’s mill in Arborg, Man. last September, might recoup some or all of his losses.
“I’ve always been hopeful,” said Sigurdson, who farms near Riverton, Man.
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“I think everybody in (the group) is more hopeful now.”
Puratone, one of the largest hog production companies in Canada, announced in September after a summer of record feed prices that it had applied for creditor protection.
Dozens of Manitoba farmers who delivered grain to Puratone’s feed mills in Winkler, Niverville and Arborg never received payment for their grain and suffered losses from $30,000 to $300,000.
Puratone owed its creditors nearly $100 million, including $86 million to secured creditors: Bank of Montreal, Farm Credit Canada and the Manitoba Agricultural Services Corporation.
Affected farmers assumed Maple Leaf Foods would cover their losses when it bought Puratone’s hog barns and feed mills for $42 million in early November. However, Maple Leaf is not legally responsible for the company’s debts because it bought only Puratone’s assets.
In December, 17 producers who delivered grain to Puratone formed Disgruntled Farmers Seek Justice.
“There’s still 17 of us together, just like we were from the beginning,” said Sigurdson.
The group is owed $910,000 for unpaid grain sales.
The judge presiding over the March 12 court hearing was expected to dispense $42 million to the company’s secured creditors, but instead paid $37 million to creditors and held the rest back for future claims.
“What they did (the court) is divide up the money, but they put $5 million in trust. So we put a claim in against that money,” Sigurdson said.
“We’re the only ones that have filed a claim so far. The banks, of course, feel that it’s their money, so they’ll be putting a claim against it also.”
Sigurdson will be back in court April 11 to make the case that unpaid farmers are owed a portion of the $5 million.
Sigurdson doesn’t expect a speedy resolution to the case. Other claimants, including FCC and BMO, will likely make presentations to the court.
“I think it’s going to be more than one more session,” he said.
“I wouldn’t be a bit surprised if we’re still going next fall.”
