KANSAS CITY, KAN. A subsidiary of Ag Processing Inc. cannot buy Lawrence-based Farmers Cooperative Assn., a federal bankruptcy judge said.
At least not yet.
U.S. Bankruptcy Judge John Flannagan on Tuesday rejected the co-op's plan to sell the bulk of its assets to AGP for nearly $12 million. The co-op had sought to make the sale by April 1, in time to prepare for the spring planting season.
Instead, Flannagan told the co-op to come up with a plan for accepting competing bids, including those from other companies Archer-Daniels-Midland Co., Bunge Corp., DeBruce Grain and Midwest Fertilizer Co. that already have expressed some interest in at least some of the bankrupt co-op's assets.
AGP may very well have the best offer, Flannagan said, but he wants to be sure. The goal of a Chapter 11 bankruptcy case, after all, is to secure the most money for creditors.
"This process is going to take whatever time is necessary, and if it takes any longer then, well, too bad," Flannagan told attorneys and another 50 observers assembled in the U.S. Bankruptcy Court. "These things take a little time to work out."
Co-op officials had hoped that Flannagan would approve AGP's offer to buy $4.5 million in hard assets. Such assets would include the co-op's elevators and other properties and equipment, excluding its headquarters at 2121 Moodie Road; an Ampride station at 1000 E. 23rd St.; and a feed store in Gardner.
Also included would be an estimated $7.23 million worth of grain, fertilizer, propane, oil and other inventories.
Although AGP's offer has secured support from the co-op's board of directors and several creditors' committees, it has yet to receive two necessary approvals: one from AGP's own board of directors, and another from Flannagan himself.
In recent days, however, other possible suitors have checked into possibilities for buying portions of the co-op's assets.
Bunge Corp. a North American division of Bunge, a $10 billion multinational agribusiness giant based in White Plains, N.Y. is among them. It sent two attorneys to Tuesday's hearing to make sure the company would have a chance to enter the game.
One of them, Larry Frazen, said he wasn't sure which assets Bunge would be interested in.
"It may be some of them," he said. "It may be all of them."