Bounced checks and unpaid bills from the bankrupt Farmers Cooperative Assn. largely would be taken care of by this spring under a payment plan being proposed by the Lawrence-based cooperative.
But members already waiting for patronage payments from the cooperative would have to wait even longer, perhaps years, before they may be fully paid.
FCA officials are circulating a plan detailing how farmers and other creditors would be paid to satisfy the bankruptcy case. Members and creditors, who received copies of the plan in the mail, are being asked to vote for the plan by Jan. 25.
Co-op representatives aren't expecting much opposition to the repayment plan.
"It is a good plan," said Stan Lentz, an attorney for the co-op. "It produces better results than most people expected when this first happened. A lot of people didn't think they would ever see their money again."
Major points of the re-payment plan include:
The first $4,300 of all unpaid grain sales would receive priority treatment and would be paid by no later than 45 days after the bankruptcy court approves the plan, which is expected late this month.
The balance of all unpaid grain sales would begin to be paid no later than 45 days after court approval, but FCA officials are not sure they would be able to pay the amounts in full. They expect the co-op to have enough cash to cover between 95 percent and 100 percent of what comes due within 45 days. If less than 100 percent is paid after the 45-day period, FCA would begin making partial payments until the full amount is paid.
Other creditors including businesses left unpaid for goods and services and people who had certificate of investments with FCA would be paid the same way.
all repayments for grain, goods and services would include a one-time 1.25 percent interest payment.
co-op members owed less than $350 in patronage payments, the payments owed them for doing business with the co-op would not be paid. FCA officials said mailing out the 3,020 checks would be an administrative burden and that co-op members would be able to write off the loss on their tax returns.
co-op members who are owed more than $350 in patronage payments could begin receiving payments 60 days after the court approves the plan, but FCA leaders said they were uncertain how large the payments might be.
"I'm not sure what percentage people could expect, but at this point I don't think it would be real large," said Pat Ross, an area farmer and a trustee in the bankruptcy proceedings.
Ross said it could be "several years" before all patronage payments are made. Ross said it also was possible FCA never would be able to fully pay-off the patronage amounts.
Much of FCA's ability to make those repayments will depend on how FCA's investments in other area cooperatives perform. FCA has about $10 million in equity in large cooperatives such as Farmland, Cenex, and Ag Processors. FCA will receive patronage payments from those cooperatives each year depending on how well they perform.
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