Pipeline Foods, LLC’s announced it had filed on July 8, 2021, for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
The MDA will update this page as we gather new information for producers affected by the bankruptcy filing.
The MDA Advises Farmers with Ties to Pipeline Foods to File Claims Grain Bond Claims by Jan. 4, 2022
The MDA is encouraging anyone who has not received payment for grain or who had grain stored at any of Pipeline Foods’ facilities located in Minnesota to submit a bond claim with the Department.
The facility, in accordance with the law, held a $500,000 bond with the Department to help grain sellers and depositors mitigate any losses. To submit a claim, a farmer will need do the following steps:
- Complete a Grain Bond Proof of Claim Form. This can be found at www.mda.state.mn.us/grain.
- Include supporting evidence. This is including but not limited to scale tickets, purchase agreements, purchase receipts, non-sufficient funds checks, contracts, warehouse receipts, assembly sheets, etc.
- Send in the form and supporting evidence by email to grain@state.mn.us or mail to:
Minnesota Department of Agriculture
Fruit, Vegetable & Grain Unit
625 North Robert St.
St Paul, MN 55155
Farmers should submit a claim as soon as possible. The deadline for claims is January 4, 2022.
The MDA will review all submitted claims, associated paperwork, internal documents, and records from inspector visits to determine which claims are valid. In the case of multiple valid claims, a pro-rated share is calculated and dispersed.
Questions on grain bond claim process can be directed to Christine Mader at 651-201-6620 or christine.mader@state.mn.us, or Nick Milanowski at 651-201-6076 or nicholas.milanowski@state.mn.us.
Information for Producers Regarding Grain Contracts with Pipeline Foods
In the wake of Pipeline Foods, LLC's bankruptcy petition, the MDA was contacted by many farmers with open contracts for delivery of grain to Pipeline Foods in the coming months wanting information about whether they could sell their grain to other buyers. In response, MDA negotiated with Pipeline Foods and obtained a stipulated order from Pipeline Food's bankruptcy court allowing farmers with open delivery contracts to deliver their grain to other purchasers without risk of a future breach of contract action for failing to deliver the grain to Pipeline Foods.
To qualify for the relief entered by the Court, you must meet the following conditions:
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You must have a contract for sale or delivery of grain in Minnesota to Pipeline Foods, with dates for delivery after July 8, 2021.
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The contract must still be open -- meaning if you have already delivered all the grain owed under your contract, the Court's order does not affect you.
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Your contract must specify that delivery is to occur in Minnesota, or that the grain will be picked up from your farm in Minnesota. Note that farmers who reside outside of Minnesota, but who have contracts for delivery in Minnesota may be covered by the order.
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You must notify Pipeline of your intent not to deliver your grain, using the Stretto form.
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You may elect not to deliver under a specific contract, or all open contracts.
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The relief afforded by the Court's order is opt-in. You must complete the form at the Stretto website to opt into the relief afforded.
There is presently no deadline to make your decision on whether to opt in to the relief the Court has afforded.
Farmers who opt into the relief afford by the order must keep records showing where they sold the grain, and the money they received and spent in connection with the alternative sale. Farmers who opt in may be required to offset their recoveries against any future claim for damages against Pipeline on the same contracts.
At present, Pipeline Foods does not have authority from the court to pay for deliveries of grain under existing contracts. The unsecured creditors' committee is exploring whether it can obtain financing that would allow Pipeline Foods to restart grain purchases on existing contracts. The committee expects to know whether such financing can be obtained by August 11. For those farmers wanting more information about the committee's efforts, you should contact the committee directly.
If you have questions concerning whether you qualify for relief under the order, you may contact Assistant Attorney General Oliver Larson at 651.757.1265 or oliver.larson@ag.state.mn.us
Please visit the Stretto website for more information and to file notice of non-delivery.
Informational Meeting on the Bankruptcy Filing
The MDA held a meeting on Wednesday, July 21, to provide information on the situation, review the state’s bond claim process for grain sellers, and take producer questions. View a recording of the meeting.
