seed cleaning plants

[mcfarms]

Had an early christmas gathering with some relatives from other parts of province last night , I was talking to one of them and the topic of cleaning seed came up with the ergot issues etc. He was telling me about their local seed cleaning coop and some things going on there. apparently the board there has decided its time for a new plant and has proceeded to try and raise capital for one. They have a little money they have saved up over the years but have never paid a dividend ever and instead issued more shares instead of dividends. In order to raise the money needed to build a new plant they went o the members asking them to buy more shares in the form of X number of dollars per seeded acres and are attempting to sell the old plant and land. Which has not sold for almost a year so he was saying.
The fund raising has fallen short of the goal as many are not either happy with the business plan or are not convinced its the best move.
So now the board has decided the the cleaning rates in the old plant for those that have not agreed to the new plant but are members of the coop in good standing and have in many cases more shares inthe coop than the board members will be double that of members that have agreed to the proposal for a new plant and signed commitments.

His question to me was can they legally do this , he felt it was completely contrary to the cooperative principal and act and was little better than extortion.

I had no idea what to tell him, any thoughts?

[farmaholic]

Sounds like a bit of strong armed discriminatory bullying. Don't have a clue if it is legal to do what they are proposing.

[wd9]

A good corp lawyer in your respective province will inform you of your rights and responsibilities. Obvious answer i know, but often people just don't do it.

[malta]

The legalality depends on the act they are under and the bylaws. Rather than a lawyer, I would get prepared for the next coop board election. If the situation is as described the boards power has gone to their head and they need to be relieved of their duties.

[wilagro]

If they continue with this discriminatory move of charging more for some members than others they will DESTROY the present Co-op and also subject themselves to a nasty court action. Rescind that policy immediately and I would suggest that a new board IS in order to restore confidence.

[buzz]

Legal challenges are seldom productive. I
suggest getting a member/voice on the coop
board that will stand for fairness. They likely can
offer different pricing for different members (new
investors) as long as it is transparent and
approved by the board. I would think they should
try harder to sell the old plant and land to pay for
the new one.

[cottonpicken]

Tell him to stay the hell out of it,sounds like the
beginning of a war.

[hobbyfrmr]

Sell the old plant to a new investor. Usually someone from out of country. They will run it like a business and be profitable. Then, all the old co-op members and directors will still bring their grain there and pay the fair market value (higher price) for grain cleaning. They will have coffee, pondering why it failed and naturally blame the others.

[bluefargo]

Sounds to me ike there is another side to this story. I don't think we are hearing all the facts.

[sumdumguy]

Seed Plants are expensive to build today and the
cost of labour is sky-rocketing. Move the seed
plant to Mexico. I would suspect, the old seed
plant wasn't paying the bills, and some guys
realized the situation.