Newco Front...Just because it's quiet doesn't mean that producers means other parties are deciding f

[sumdumguy]

Burbert, I agree, some have reputations. I know
people who were burnt bad by a fraudster and
they went right back to dealing with him. Maybe
they got their money from him and I didn't? There
were about 15 who were stung by this guy and
he is back in operation, in the same industry. Go
figure, makes me wonder.

[oneoff]

The bond payout was via Government of Canada cheques. There is no need to get up and run to cash them. Take a deep breath at least. There is as close to zero percent of any stop payment as you will ever see in your lives.

When you have a clear head; contemplate a dumb ass accountant who apparently given the opinion that cashing those cheques will forfeit any further claims against the insured.
Immediately call Bull Shit and check out if your gut instinct says that the bonding company and still outstanding producer shortfall of bond couldn't possibly be forfeited by cashing the government cheque. Do this by contacting the CGC writer (and his supervisor who authorized the wording of the letter and the mailing to all eligble producers.) You will then have all but undeniably confirmed the incompetant opinion of that accountant; or the deliberate/inacurrate/otherwise spreading of confirmed Bull Shit.

Point this out to the owner of Newco; contact the bonding company Atradius. You will then be the second unsecured creditor to do so; and probably get to talk to a real human being; that probably genuinely appreciates getting some fresh information that maybe has a snowballs chance given the right coditions and some luck.

Be half assed concise; promote a relatively simple, yet sensible proposal that is a potential win-win situation for all unsecured creditors that are at obvious risk of all getting pennies on the dollar.

. I argued in a logical way that I am an unsecured producer who is still owed some thousands of dollars. My estimate is that the 120 some odd peers are now owed approximately only $150,000 which is a relatively small fraction of the $2M that Atradius is out of pocket (again by my estimation)
I very calmly argued unsecured creditors such as myself should be entitled to be similarly negotiating with Newco (as is suspected to be happening between Atradius and Newco even as I write this; and may well be concluded within days). However; if Atradius could see fit to reimbuse the less than 5% still owing to eligible producers; that while they might then have a $2.15 M claim instead of $2M; that the good will and sheer relief of having settled with all "eligible producers" might well be money well spent. It would immensely simplify Atradius negotiating with or taking control of the insured or putting them into receivership or whatever direction they chose.
Perhaps of even more importance, I suggested was that there is a new insurance based guaranteed payment system coming down the same CGC pipe; as sure as anything. And the front runner is probably none other than their company, Atradius. What better start could an insurance/bonding company come up with at this strategic time where that very decision is going to be made?
I was thanked for my concern and suggestion (I believe sincerely); and only promised that as soon as he got off the phone that he would "pointedly" relay my idea to his boss; and that nothing else was guaranteed. Now I like that kind of honesty; and I said so.

Within 10 minutes; I am told my phone rang; and I am told that the proposal was received along the lines of "like your suggestion; some reason to feel a little encouraged and it seems like there is a bit of development occuring".

Now obviously no one knows what will shake out; but you know that bit of encouagement warms my little heart. I believe if there were even three or four more thoughtful reasonable representations to the movers and shakers; the tide might well be overestimated as a groundswell movement.

All I know for sure is that the minimum is all that has happened in the last half year; and I've tried to put my best foot forward with what is more than fine tuning some premature decision without first considering a wide array of alternatives.

And that in no way can come from any board table that has every right arm attached to the pulley system that carries the motions unanimously; every time. See some other recent posts (of other persons) if you need some confirmation.

What I also keep getting confirmed is that next to no one in this day and age takes the initiative to talk to their supposed competitors; perceived enemies or the rich and powerful who must eat and clothe themelves in some mystically differnt way than simple commoners.

When you finally make contact with those people; you will most often have met some interesting stimulating human being. And they just love to have some unique ides bounced off them. And you will get the same in return.

Try it.

[LWeber]

I'm curious Oneoff:

Did you deal directly with Newco - as in the contract came from their office to you or did you deal/negotiate through a third party?

[oneoff]

Thanks for the CGC link Charles...

I note the date, in fact nice and fresh news.

But its really two week old stuff; but agreeably much better late than never. A lot has happened in the last few days. And there might even be a bit of momentum being gained.


If you want some up to the minute stuff on which you most likely pretty well bet the farm; you need to sort out the red herrings from the probable reasonable outcomes; and the 100% bull shit propaganda from potentially lasting desirable solutions.

And that takes some unbiased analysis after confirmations of much deeper research of all sides; and especially those not normally consulted.

How many have clicked on shaney's topic about CGC changes.

Probably an opportune time for EVERYONE to get "pen to paper" or better " keystoke to email" and send you comments and suggestions to the CGC

See shany's links in his topic concerning the CGC process for input.

[oneoff]

Larry: What might be said is that last spring Newco was looking at sourcing large volumes of feed winter wheat from anywhere they could get it. Just about every other feed mill, broker and livestock feeder was in the same bind; particularly after Newco's trouble. Even the bigger boys wanted the remaining scraps; and they literally didn't know what they would be invoving themselves in. At least one of the most respected and largest firms of grain buyers in Western Canada; backed out of initally agreeing to take over a firm commitment.

Its safe to say that almost everything that happened in the last 6 months is new territory for everyone. And none of the outcomes have been predictable; which is all in the definition of a true "CF". I prefer to call such situations a complete lack of foresight and planning. And failure.

And I predict grain buying is headed for much more of the same until we get down to instant weights; agreement on price for whatever the quality required; payment on delivery, and the return of good reputations, full integrity and faith in personal responsibility as the foundation of every business deal.

Nothing else is good enough; and settling on 90% of debts (months or years later) is an invitation to getting pennies on the dollar in the long haul.
I know that Newco also engaged "third party brokers" to line up some of that grain. At that time; Manitoba firms were driving trucks all the way to Alberta to get the last loads of feed grains available; and Alberta firms such as Newco were forced to haul from any province they could find a seller willing to contract.
I know that at least some Sask producers were initially contacted by "third party brokers " who reommended Newco as a licenced, bonded firm with a solid reecord. In at least some of those cases; all future contract signing and logistics were through the Newco firm.

Larry, please tell us what thought prompted this request for info on how the various contracts may have been negotiated. Now I'm interested in this excellent question.

[LWeber]

1) Their bonding requirement was predicated on what type of business they were operating. There are different classifications with different bonding requirements. If they were using third parties to source grain for them and they had storage and thier own trucks, they were acting as a more than a grain dealer.

2) My question was aimed at their classification and how they were operating versus what their bond stated. If they had their own trucks, a good lawyer would call that storage, and should have been classified as a primary elevator. That would have changed the bonding requirement greatly. I don't see the CGC as lily white in this instance; however, you have much more info than I do.

3) Before a company goes tits up, the industry knows long before farmers they are in trouble. Bad trades - l/c problems with other shipments; slow payments. It really is a small industry. That info is rarely passed back to farmers and is why farmers ultimately get bent over. That was the second half of my question.

There was a legitimate reason that major company backed out of the sale. You may or may not know what it was - I sure don't. There are trading rules to follow with GAFTA as a resolution. The moment they backed out - your grain was at a higher risk.

If you knew that before you signed your contract, you should have been prepared for it. If you didn't, the risk was shifted from the grain company that backed out to you. And that is the part that is bullshit.

[oneoff]

Sometimes a real life story contains a better story line than any soap opera or Oscar (or is it Emmy winning) Hollywood movie.
And sometimes the guys running governments or the biggest business or the most important positions in the world just aren't that smart; and seemingly don't have any or all the answers.

Maybe its common sense; and the rare ability to throw 20 angles in a pot and still keep the root and basic issues straight; while attempting to move forward with a reasonable set of policies and decisions. But we have probably all run across a very few people who are usually capable of that task. Why aren't they used more often; and consulted more frequently?


So Larry.... I believe that there were several ways used to source grain for their customers (at the same time).

And know that when one is fulfilling their end of a producer contract you obviously desire immmediate payment; but that is impossible when there is no legal weight immediately obtainable; and the truckers don't get their paperwork in before the end of the week to their dispatcher; (or sometimes the next week I have been told; or it gets lost altogether); and it takes time for the truckig company to submit paperwork, and time for the broker and time for the cheaue to be cut and then Canada Post and then a 5 day clearing period for the bank to permanently put the money owed into your account. Now thats what any reasonable producer is expected to put up with.

Not to mention having to wait 6 months for a bond payout to be processed. And that is where the CGC apparatus and Federal Government and Atradius are anything but 100% efficient and trustworthy.

When was the last time there was so little coverage of a ponzi scheme needed to pay off last months deliveries with proceeds from more recent deliveries until some word leaked out to CGC who latched onto their "letter of credit" (or something along that line)?
Google "Newco" and all you get is a company not in receivership or bankruptcy; and some references to Agriville comments. Look a little harder and you find one refernce to the fact that they are no longer licenced or bonded; but then lots of other companies and feed purchasers never have been; and are operating exactly the same as Newco.

The sad truth is that if you aren't willing to forward contract; or agree to common industry payment periods that give enough time for the producer to act as the banker till the "broker" gets paid by his customer; then you have few other sales options.

Now for the major "line company" who wanted badly to assume that totally separate other contract that was still outstanding. (the only problem being that it was held by the company that had just said "sorry our bank account was just shut down; we can't pay you; but you know we still have this other contract from a couple days ago and we're shopping it around and would act as brokers and you'd be paid directly by a certain "line company".

So its late in the year; winter wheat prices are even better than a few days ago; and you did sign a valid contract for several additional loads.

Well it turned out just as I said; the "line company" said the wanted it; then phoned a couple of days later and said they had decided to pass because of legal uncertainties; but through other middlemen they ended up getting it shortly thereafter. The cheques cleared months ago; and I guess that a small "broker fee" was probably applied against a debt that was owed to the other middleman that saw it as a way to recover at least something from what he was similarly legitimately owed on three loads of some other grain not covered by bonding.

And now I have some sympathy for an auditor's job.

And I also know that "prepayment" or immediate payment or at least a substantial down payment would have prevented any possibility of a $3M or so shortfall in these cases.

And I predict that that remedy will never be a commonly acceptable way for farmers to receive payment in the future.

We will be insuring even more financially unstable buyers; and the premiums will increase proportionately

Common sense; with more than one factor in the mix.

[oneoff]

Sometimes a real life story contains a better story line than any soap opera or Oscar (or is it Emmy winning) Hollywood movie.
And sometimes the guys running governments or the biggest business or the most important positions in the world just aren't that smart; and seemingly don't have any or all the answers.

Maybe its common sense; and the rare ability to throw 20 angles in a pot and still keep the root and basic issues straight; while attempting to move forward with a reasonable set of policies and decisions. But we have probably all run across a very few people who are usually capable of that task. Why aren't they used more often; and consulted more frequently?


So Larry.... I believe that there were several ways used to source grain for their customers (at the same time).

And know that when one is fulfilling their end of a producer contract you obviously desire immmediate payment; but that is impossible when there is no legal weight immediately obtainable; and the truckers don't get their paperwork in before the end of the week to their dispatcher; (or sometimes the next week I have been told; or it gets lost altogether); and it takes time for the truckig company to submit paperwork, and time for the broker and time for the cheaue to be cut and then Canada Post and then a 5 day clearing period for the bank to permanently put the money owed into your account. Now thats what any reasonable producer is expected to put up with.

Not to mention having to wait 6 months for a bond payout to be processed. And that is where the CGC apparatus and Federal Government and Atradius are anything but 100% efficient and trustworthy.

When was the last time there was so little coverage of a ponzi scheme needed to pay off last months deliveries with proceeds from more recent deliveries until some word leaked out to CGC who latched onto their "letter of credit" (or something along that line)?
Google "Newco" and all you get is a company not in receivership or bankruptcy; and some references to Agriville comments. Look a little harder and you find one refernce to the fact that they are no longer licenced or bonded; but then lots of other companies and feed purchasers never have been; and are operating exactly the same as Newco.

The sad truth is that if you aren't willing to forward contract; or agree to common industry payment periods that give enough time for the producer to act as the banker till the "broker" gets paid by his customer; then you have few other sales options.

Now for the major "line company" who wanted badly to assume that totally separate other contract that was still outstanding. (the only problem being that it was held by the company that had just said "sorry our bank account was just shut down; we can't pay you; but you know we still have this other contract from a couple days ago and we're shopping it around and would act as brokers and you'd be paid directly by a certain "line company".

So its late in the year; winter wheat prices are even better than a few days ago; and you did sign a valid contract for several additional loads.

Well it turned out just as I said; the "line company" said the wanted it; then phoned a couple of days later and said they had decided to pass because of legal uncertainties; but through other middlemen they ended up getting it shortly thereafter. The cheques cleared months ago; and I guess that a small "broker fee" was probably applied against a debt that was owed to the other middleman that saw it as a way to recover at least something from what he was similarly legitimately owed on three loads of some other grain not covered by bonding.

And now I have some sympathy for an auditor's job.

And I also know that "prepayment" or immediate payment or at least a substantial down payment would have prevented any possibility of a $3M or so shortfall in these cases.

And I predict that that remedy will never be a commonly acceptable way for farmers to receive payment in the future.

We will be insuring even more financially unstable buyers; and the premiums will increase proportionately

Common sense; with more than one factor in the mix.

[oneoff]

Larry.. reread your last post.

I had concentrated on the truckers destinations and have all the feedlots,feed mills and colonies that the loads each went too.
Perhaps what was totally overlooked was that there might have been another middleman; bigger player. Also have the trucking company licence numbers and the firms names. Simple matter to see what the patterns are...a little later.
Now that is an very interesting possibility, and I appreciate and value information that every producer might use to be become better informed.

[oneoff]

Further rearch reveals no common correlation between contracts and any othe business's trucking firm. Well worth checking out though. Thanks