Stamp Farms files Chapter 11 bankruptcy, plans to explore asset sales

By Caroline Salls

Pittsburgh, Dec. 4 - Stamp Farms, LLC filed Chapter 11 bankruptcy on Nov. 30 in the U.S. Bankruptcy Court for the Western District of Michigan.

As a result of a combination of factors, Stamp Farms said its operations suffered significant losses and it defaulted on its credit agreement with Wells Fargo Bank, NA.

The company said the contributing factors included poor business judgments, a very poor 2012 harvest resulting from severe drought conditions, grain inventory shortages resulting from accounting errors, inadequate accounting systems and the failure to optimize grain marketing and hedging strategies.

In conjunction with the bankruptcy filing, Stamp Farms requested court approval to use $1.7 million of the cash collateral of its pre-bankruptcy lender Wells Fargo Bank to pay for the costs of winding up its 2012 farming operations, collecting and maintaining the security of farm equipment and stored grain and to seek potential sales of the debtors' assets and business operations along with other efforts to liquidate the assets.

In addition, the company said Wells Fargo may provide debtor-in-possession financing from time to time to the extent that Stamp Farms does not have enough cash collateral to pay required expenditures.

According to court documents, Stamp Farms has $10 million to $50 million in assets and $50 million to $100 million in debt.

The company's largest unsecured creditor is Monsanto Co. of Chicago, with a $3.94 million claim. Stamp Farms did not list any other unsecured creditors with claims of $1 million or more.

The company is represented by Varnum, Riddering, Schmidt & Howlett.

Stamp Farms is a Decatur, Mich., commercial grain farming business. Its Chapter 11 case number is 12-10410.

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