Farmers who contracted with Consolidated Growers and Processors Inc. will face many questions in the near future.
Two United States bankruptcy lawyers contacted by The Western Producer said the farmers will first need a legal opinion on whether they own the hemp seed and fibre stored on their farms.
The company is behind on payments, but farmers need legal help to determine whether CGP has breached its contract.
“The question is, whose product is it?” said Jay Ochroch, a bankruptcy lawyer from Philadelphia, Pennsylvania with 32 years’ experience. Because farmers hold the product, they may have a “possessory lien” on it, he said.
Read Also
Land crash warning rejected
A technical analyst believes that Saskatchewan land values could be due for a correction, but land owners and FCC say supply/demand fundamentals drive land prices – not mathematical models
“They have to determine whether they can dispose of the property and keep the money,” said Ochroch.
A handful of farmers have been paid for one-third of their crop.
And most of the farmers have only paid for one-third of the planting seed they bought from CGP last spring.
If CGP is bankrupt, farmers should get the help of a lawyer who specializes in U.S. bankruptcy law, said Jay Welford of Jaffe, Raitt, Heuer and Weiss in Detroit, Michigan.
“The question is, who owns the grain right now? Have they (CGP) bought it, or not yet?” said Welford.
“It’s a major question that can’t be answered by you and me.”
If the company has filed for or has been pushed into bankruptcy by creditors, farmers will need someone to make sure they don’t miss critical hearings and opportunities to have their interests put forward.
“These cases move very, very fast,” said Welford, a bankruptcy lawyer for 18 years.
– RAMPTON
