SPRINGFIELD -- A Central Illinois farmer facing a lawsuit over his alleged role in the demise of a Towanda grain elevator has filed for Chapter 11 bankruptcy, along with his wife.

Robert and Julie Printz of Hudson filed for bankruptcy reorganization Dec. 31 in U.S. Bankruptcy Court in Springfield. Printz Farms operates on about 8,000 acres, mostly cash-rent land in McLean and Livingston counties. They also own smaller trucking, seed and farm-equipment firms.

Together, the businesses employ more than two-dozen full- and part-time employees, with annual gross revenues of more than $8 million, court filings show.

The bankruptcy filing estimates the Printzes' liabilities at between $10 million and $50 million, owed to 85 creditors. The 20 largest creditors with unsecured claims - totaling about $6.8 million - include farm-input suppliers, insurance firms and farmer cooperatives. The Printzes say the debts are primarily business-related.

Among the Top 20 creditors is CoBank, a Colorado-based agricultural lender that in June sued Robert Printz in federal court, seeking $4.6 million. That is about a third of what the bank says Printz obtained from Towanda Grain Co., a CoBank client, through loans or advances in 30 separate transactions in 2009-2010.

The grain elevator was closed by the state in May when problems arose in its balance sheet, and the owners eventually sold it to Evergreen FS. CoBank has claimed the Printz losses are the "cause or major cause" of Towanda Grain going out of business.

The Illinois Department of Agriculture is still investigating the elevator's failure, spokesman Jeff Squibb said Thursday.

"Of course, if wrongdoing is discovered, we'll certainly seek to prosecute to the fullest extent of the law," he said.

The third-largest unsecured creditor is Alliance Grain Co., a Gibson City-based farmer co-op with 13 grain elevators in Central Illinois. The $449,657 debt stems from Printz failing to deliver on a sales contract for more than 250,000 bushels of corn for an ethanol plant, said Alliance Grain General Manager Joe Thompson.

Thompson said he did not know why Printz did not deliver, but the contract shortage put the farmer on the hook for the lost bushels.

"Half a million dollars is significant. But it's nothing our company can't stand," Thompson said, adding that Printz is not currently allowed to do business with Alliance.

A hearing related to the bankruptcy is set for 10 a.m. Friday in Springfield. The Printzes are seeking approval to use some cash collateral and obtain credit for farming inputs for the 2011 crop, so they can continue to operate their businesses and "preserve and enhance the value of their estate," according to court filings.

The Printzes' filing puts their estimated total assets at $10 million to $50 million. They own houses in Fairbury and Anchor, and have their principal offices and operations in Fairbury and Lexington, records show.

Chapter 11 bankruptcy provides generally for reorganization, usually involving a corporation or a partnership. It usually sets out a plan to keep a business going and pay back creditors over time.

Attempts to reach the Printzes or their attorneys were not successful Thursday.

http://www.pantagraph.com/business/local/article_2aa8f1ee-19b5-11e0-a0a3-001cc4c002e0.html

"for you guys waiting for this ag bubble to pop.....it might already be happening, but its not a secular pop, its going to happen to those that were running on too thin of a margin..."

We're seeing some hiccups over in this neck of the woods also..  Everyone thinks we in Ag are making out like bandits... here are some interesting tidbits from my accountant..

a) When diesel fuel hit $4.00 in 08.. it was costing us just under $18,000 per WEEK to keep the water flowing...

b) Our fertilizer bill ALONE in 08 was larger than our cash receipts for the entire farm in the mid 1980's.. over about the same amount/slightly smaller.. of acerage.  We are near those levels again... and we flat out may not apply fertility to some acreage this year.. given the prospects.

Margins are TIGHT in Ag..  $4.00 diesel fuel, Stratospheric fertilizer bills.. (not sure if we buy the N for the Wheat top dressing this year or not..???) Sky high seed costs.. etc..

Today you've got guys forward contracted on a lot of $3.00 corn.. which is okay if you bought $3.00 corn inputs.. Today corn inputs are $6.00.. which if you are selling $6.00 you can still pencil... However, paying $6.00 inputs with $3.00 corn... isn't going to work...  and the law won't let you "switch and market" your way out of it... (aka forget the $3.00 contract and shhhh!! sell across the street for $6.00...    no.. can... do...)

Here on the plains.. alot of our wheat isn't up yet.. we need this weekend's snow.. or the fertilizer companies can keep their high dollar N!!!  ditto the seed companies...

You mean you can't just leverage your way through and keep going without a hitch?  I thought that was what the leverage was for, when times get rough.  Wow, who would ever have thought there was an example floating around of what happens when a person is not keeping equity in the business.  :~)

wheat farmer you would make the best corn combine ever built. All you do is pick, pick, pick. LOL

Don't fall off your stool chuckling.   O lord it's hard to be humble.........

well, given that he was financed deep enough to go bankrupt, I would expect the lender said so.

Not always plowboy.

I don't much go for letting lenders tell me how to run my business, but then we're not bankrupt, either, so they don't need to. 

With a little research the litigation surrounding non delivery is larger than one thinks. Illinois happens to be a state with a grain fund and the farmers have some protection. Recall Ty-Walk? A-Way are a few recent events.

A large non-delivery issue happened between another BTO and substantial regional grain merchant in Champaign. This case is in federal court a few years ago that claimed millions. Looking in circuit courts will also reveal some more non-delivery claims of a more minor nature.

The tragedy that a community business is destroyed or future customers will get less as the elevator adjusts their margins to recover lost equity.

An equal tradegy for farmers is fewer delivery points.   

Know your counterparties.

It is ironic that the elevator guys go to industry meetings and one of the recurring topics is counterparty risk. Meaning the farmer risk to the grain elevator and the mantra is know your customer. They is you do 360 they do not like farmer's prying into their financial condition. And the ag vendors are another risk for the farmer, especially with the prepay issue.

A long time mentor offered up that key events that change the financial condition are the 3D's.
Death
Divorce
Disability
and could likely add Disaster to cover the farming production risks.

You guys are missing my point.  My point is that the elevator should have never taken such a position without some sort of guarantee of performance.   This is why cash sales are inherently risky.  If you keep the margin up, there is no risk of "non-delivery" because you already have the money in hand.  Well, I suppose there is still some slight logistic risk, but there is no opportunity to end up millions out. 

Can someone provide a place to read the details of this deal?  I can see what I imagine happened, but I do not know for sure.  It sounds to me like part of it was a typical "price later" deal where they forward some percentage up front on grain delivered, then futures went bad producing losses greater then the "slack" they had left between the bid and the amount they forwarded?    The failure to deliver part I am pretty sure I understand....elevator cash contracted with farmer and did not collect any margin from him, so when the futures went bad they were out the margin money on their own account and never colelcted any from the cash selller....then when he defaulted, they were holding the bag.  

Sorry, I'm sure some of you are going to get all wound up and yell at me, but the managers who got the elevators into these deals should have been smart enough to see the risks they were taking in the event of customer's defaulting due to bankruptcy or whatever.  Basically they were carrying speculative futures positions on behalf of the customer, using their account to finance it. 

Yeah always someone elses fault, not the farmers.

I would say there is nothing wrong with cash forward contracts. Honor your damn contract. Here is a prime example of one of your ##$#$%$$ Never mind not going to get into it. one thing strikes me odd , You seem to be half a##ed sticking up for the farmer here ployboy.

Someday you need to learn how to freaking read.

I kinda wondered if that was just him intentionally being a jackass, but I have had the same mispell happen on racing chat boards by numerous people with no prior history, so I guess I'm chalking it up to poor speed typing....although it seems like an illogical typo...being the opposite hand and all. 

It was a typo. Sorry, hard to type laying on the couch , keeping your one year old from banging on the keyboard.

lol...always interesting having to fight for control of the keyboard.

Typing on a laptop in the dark is fun, too. 

I read just fine. You sit there talking about the elevator this elevator that.,  never really mention the BTO that screwed them. 

As the manager of the elevator, there are certain things which are under your control, and certain things which you have less ability to control.   Someone else declaring bankruptcy is definitely in the second group.   It is your job as a manager to prevent things which are out of your control from putting you of business.    It certainly appears from the facts reported that the guy running that place failed to do that.

I have said nothing about the farmer.  You are making that up on your own. 

Well, if the manager worked for me, either directly or as a board member, you can bet he would be held accountable for it.  It would appear that the board members thought likewise.     Bankruptcy is part of the legal climate.    If you want to remain in business, you better keep that in mind and not crawl out on a limb like that.  I can't believe they didn't cover that in coop-manager prep school. 

I cant believe they didnt teach how to manage a farm , dont take on too much risk, fullfill your contracts and pay your bills in BTO 101.