LINCOLN, Neb. (DTN) -- Zeeland, Michigan-based Boersen Farms asked a federal judge on Wednesday to allow it to sell three parcels of land and use the proceeds to pay creditors including a Utah-based equipment leasing company that the farm owes $33.2 million, according to a motion and brief filed in federal court.
Boersen Farms leased more than 120 center pivots and other equipment from TFG-Michigan, a subsidiary of Utah-based TFG, and according to court records, has yet to pay for the leases. TFG sued Boersen Farms in 2017 and later received a court order preventing the farm from selling property, as well as garnishment on the debt.
Boersen Farms told the U.S. District Court for the District of Western Michigan this week that the farm "has been liquidating its property, paying the proceeds to secured creditors, including some to plaintiff."
The farm owned by Dennis Boersen, however, has not filed a list of secured creditors with the court and did not specify to whom proceeds have been paid or the amount of those payments.
As of Dec. 20, 2024, Boersen Farms has not filed for bankruptcy protection despite announcing liquidation.
Boersen Farms has for years faced lawsuits from companies that provided products and services to the farm that once operated about 83,000 acres. Those lawsuits were filed in an attempt to force Boersen Farms to pay money owed to the companies.
The farm was moving toward Chapter 11 in 2017 on the $145 million in loans owed to CHS Capital LLC, but a then newly formed lender based in Zeeland, LT Capital LLC, agreed to take on the Boersen Farm debt to CHS, https://www.dtnpf.com/….
Boersen Farms attorney Ronald J. VanderVeen with Cunningham Dalman, PC in Holland, Michigan, did not respond to DTN's request for more information.
POSSIBLE LAND SALE
Boersen Farms is trying to sell two parcels of land in Battle Creek County and one parcel in Ottawa County.
"While plaintiff (TFG-Michigan) has a judgment lien, the lien is subordinate to a mortgage in favor of B&K Holdings, LLC (assignee of First Farmer's Bank and Trust and Ceres Partners) on the Battle Creek property which has a balance in excess of $500,000," the farm said in a brief filed this week.
"Boersen Farms believes that plaintiff's judgment line is a first lien on the Ottawa County property. To sell the property, Boersen Farms needs relief from this court's order(s) as described in the motion."
Ceres Partners LLC is a South Bend, Indiana-based investment management firm focused on food and agriculture, https://www.cerespartners.com/….
The federal court entered an order on Jan. 8, 2021, restraining Boersen Farms from conveying property. That order has been amended to allow sales of property with the most recent amendment coming on Dec. 28, 2022.
"The current property can be sold to pay Boersen Farms taxes, an amount on its mortgage and substantial amounts to plaintiff," the farm told the federal court this week.
"As to the Battle Creek property, plaintiff's judgment lien, as described in the motion, was recorded after the mortgage. Thus, plaintiff's lien is subordinate to the mortgage. Since the balance on B&K Holding's mortgage is for much more than the sales proceeds, there are no proceeds available for plaintiff. The Ottawa property is a different story. There is no mortgage. Plaintiff will be entitled to the net proceeds, payable over time with the land contract payments and a maturity date or payoff in four years. Here, such relief should be amending the order to allow the property to be sold and proceeds paid as outlined above. If not allowed, the property will go through tax foreclosure."
AGREEMENT TO SELL LAND
According to court documents, Boersen Farms said it has an agreement to sell the land.
That includes selling the two Battle Creek County properties for $200,000 "with the proceeds to be applied to its mortgage" owed to B&K Holdings.
In addition, Boersen Farms told the court it has "agreed to sell" the Ottawa County property on a land contract to B&K Holdings for "$450,000 with $5,000 down, payments of $3,224 per month and a maturity date and payoff on Dec. 31, 2028."
Boersen Farms told the court it believes the property is "worth about $450,000."
The farm said the proceeds from the Ottawa County property sale would be used to pay the costs of closing, sales tax and "property taxes that are due and owing and will go to tax foreclosure soon."
Boersen Farms said in a court document that, "No amount of the proceeds from the Ottawa property will be paid to any defendant."
Earlier this year, a lawsuit alleging Boersen Farms leased farm equipment and sold it to a third party even though the farm didn't own it. The lawsuit was voluntarily dismissed on a technicality, https://www.dtnpf.com/….
According to court documents, two limited liability corporations owned by the farm and operated by Dennis Boersen's wife, Stacy, and son, Nicholas, are the subject of an ongoing crop insurance fraud investigation, https://www.dtnpf.com/….
The IRS executed a search warrant on June 9, 2021, at Boersen Farms, https://www.dtnpf.com/….
Todd Neeley can be reached at todd.neeley@dtn.com
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