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red river valley | The ninety year old lady never is going to get the stock back in her name is correct. She also probably is not liable for any fixed costs should the beets not get planted. She most likely was not in the room when the general partner contracted the shares with the co-op and she did not even know what a "five year agreement" was much less signed one. The general partner signed it. It would take her lawyer about 10 seconds to file a lawsuit for recovery of damages against the general partner. The Co-op has stated they will not take the shares back. They will file a lien against them,they will take any unit retains due, they will take any portion of crop delivered that has not been paid out. So is the little old lady at the same level of risk as the general partner? The general partner can grow them and with current market outlooks a chance of profit is slim. In all likelihood a loss of 100 to 200 dollars an acre is not out of the question. Or he can not plant them and pay his share of fixed costs which ACS estimates in the 500 dollar per acre range. If he thinks his share is half he better think again. The little old lady did not sign the five year agreement, he did. Her lawyer will sue the general partner and, my lawyer has advised me, she will most likely win.
So -grower unlimited downside risk
Little old lady-downside capped at zero rent. Is she liable for any fixed costs? Not likely other than her lawyers fees. Will she lose her stock? No. Crystal has stated they will not repossess stock only file lien. She will get lien removed when she wins lawsuit against general partner.
Do general partners shoulder the same risk as limited partners? To me the answer is no and this is the problem I have with JV's. | |
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"interesting add" for ACS shares on Fargo Craigs list
