CASE NO. 09-50086-RLJ-11 (Jointly Administered).United States Bankruptcy Court, N.D. Texas, Lubbock Division.
April 10, 2009
ROBERT A. (ANDY) AYCOCK, STATE BAR NO 00789782, DAX D VOSS, STATE BAR NO. 24047044, FIELD, MANNING, STONE, HAWTHORNE AYCOCK, P.C., A Professional Corporation, Lubbock, Texas, ATTORNEYS FOR UNIFEED HI-PRO INC.
DAVID LANGSTON, STATE BAR NO. 11923800, DARRELL J GUTHRIE, STATE BAR NO. 24007289, MULLIN HOARD BROWN, L.L.P., Lubbock, Texas, ATTORNEYS FOR DEBTORS.
UNIFEED HI-PRO, INC. AND DEBTORS’ STIPULATED FACTS FOR HEARING ON DEBTORS’ MOTION PURSUANT TO 11 U.S.C. SECTION 549 FOR TURNOVER OF PROPERTY OF THE ESTATE TRANSFERRED POST-PETITION TO HI-PRO FEEDS, FRIONA, TEXAS
Robert Jones, Bankruptcy Judge
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW UNIFEED HI-PRO, INC. (hereinafter “Hi-Pro”) a Creditor, and the Debtors[1] by their respective counsel of record, hereby submit their Stipulated Facts for the hearing on Debtors’ Motion Pursuant to 11 U.S.C. Section 549 for Turnover of Property of the Estate Transferred Post-Petition to Hi-Pro Feeds
(hereinafter “Motion for Turnover”) [Docket No. 66] and show the Court as follows:
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I. Stipulated Facts
1. The parties stipulate to the following facts:
a. Fullmer Cattle Company New Mexico, L.L.C. (hereinafter “Debtor Fullmer Cattle”), operates a dairy calf operation in Dexter, New Mexico, and is a Debtor in this bankruptcy case.
b. On October 1, 2008, Debtor Fullmer Cattle and Unifeed Hi-Pro, Inc. (hereinafter “Hi-Pro”) entered into a contract, which provided that the Debtor Fullmer Cattle would purchase and Hi-Pro would sell 9,000 tons of crimped corn over a 12-month period for the delivered price of $249.60 per ton (hereinafter “the Contract”).
c. Debtor was to take delivery of 750 tons of crimped corn each month pursuant to the terms of the contract.
d. The contractual relationship between Debtor Fullmer Cattle and Hi-Pro was at all times to be conducted on a cash basis and Debtor Fullmer Cattle was not extended credit by Hi-Pro.
e. It was the normal business practice of Hi Pro to demand and require that Debtor maintain a positive cash balance in its account with Hi Pro before it could receive delivery of feed corn from Hi Pro.
f. Hi-Pro’s exhibits A-H are may be admitted with no objections from Debtor.
g. Debtor Fullmer Cattle’s exhibits 1-7 may be admitted with no objections from Hi-Pro.
h. Hi-Pro delivered grain and Debtor Fullmer Cattle accepted the delivery of grain for a period of five months from October 2008 to February 2009.
i. No notice was provided by either party canceling the contract prior to March 2, 2009.
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The contract has neither been accepted nor rejected pursuant to 11 U.S.C. § 365.
j. Debtor Fullmer Cattle purchased less than 750 tons of grain from Hi-Pro each month during the five month period.
k. On February 23, 2009, Hi-Pro, by and through an e-mail correspondence from Laura Odens, informed Debtor Fullmer Cattle that it was behind on the Contract with Hi-Pro by 1,592 tons of grain.
1. By and through the same e-mail correspondence from Laura Odens, Hi-Pro also informed Debtor Fullmer Cattle that Hi-Pro had sold off 1640 tons of grain and that Hi-Pro was going to invoice Debtor Fullmer Cattle the amount of $129,127.04.
m. On February 23, 2009, Hi-Pro sent Invoice No. 152689 to Debtor Fuller Cattle for the amount of $129,127.04
n. On March 2, 2009, Que Jay Fullmer and Debora Jean Fullmer filed a voluntary petition for relief under Chapter 11 and eleven other limited liability companies, including Debtor Fullmer Cattle, owned by or affiliated with the Mr. and Mrs. Fuller, each filed a voluntary bankruptcy petition on the same date, which said bankruptcy cases are now jointly administered under Case No. 09-50086-rlj-11.
o. On Thursday, March 5, 2009, Hi-Pro, by and through an e-mail correspondence from Laura Odens, sent an estimation of the cost of feed to be provided to Debtor Fullmer Cattle’s Dexter facility from March 9, 2009, to March 13, 2009. The estimated cost provided was $30,000.00.
p. On Tuesday, March 10, 2009, Debtor Fullmer Cattle transferred $30,000.00 to the Hi-Pro Account at Amarillo National Bank.
q. On Wednesday, March 11, 2009, David Langston, attorney for Debtor Fullmer Cattle,
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spoke with Richard Fitzgerald of Hi-Pro and informed Hi-Pro of Debtor Fullmer Cattle’s bankruptcy.
r. On Friday, March 13, 2009, Debtor Fullmer Cattle demanded either delivery of the grain or a return of the $30,000.00 it had sent via wire transfer on March 10, 2009.
s. On March 16, 2009, the Debtors filed their Motion for Turnover against Hi-Pro, which has been set for hearing on Tuesday, March 31, 2009 at 9:00 a.m.
t. The parties agree and stipulate that if called, Gary Regner, of Debtor Fullmer Cattle would offer the following testimony, and Debtor Fullmer Cattle proffers the same:
i. Pursuant to the email sent by Laura Odens on March 5, 2009, estimated the cost of feed for the week of March 9, 2009, through March 13, 2009, to be $30,000.00, on Tuesday, March 10, 2009, Debtor Fullmer Cattle transferred $30,000.00 to the Hi-Pro Account at Amarillo National Bank.
iii. On Wednesday, March 11, 2009, at 10:51 a.m., Hi-Pro, by and through an e-mail correspondence from Laura Odens, sent notice to Debtor Fullmer Cattle that all feed orders have been cancelled, per management, until the invoice for corn sold is paid.
u. The parties agree and stipulate that if called, Richard Fitzgerald, of Hi-Pro would offer the following testimony, and Hi-Pro proffers the same:
i. Prior to Hi-Pro crediting the Debtor Fullmer Cattle account with the $30,000.00 payment, said account had a negative balance.
ii. After application of the $30,000.00 transfer to Hi Pro, there remains a negative balance in Debtors’ account which reflects amounts owed by Debtor to Hi-Pro.
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iii. The Debtors did not provide Hi-Pro with any notice with regard to the purpose or use of the $30,000.00 payment
iv. Hi-Pro made the decision to cancel any deliveries to Debtor Fullmer Cattle on March 9, 2009.
v. Hi-Pro’s business consists in whole or in part of entering into forward contracts as or with merchants.
vi. At the time the contract with Debtor Fullmer Cattle was executed while Hi-Pro was conducting business in the commodities market.
Accordingly, Hi-Pro and Debtors submit these Stipulated Facts
to the Court only for the purpose of the hearing on Debtors’ Motion Pursuant to 11 U.S.C. Section 549 for Turnover of Property of the Estate Transferred Post-Petition to Hi-Pro Feeds, which is set for Tuesday, March 31, 2009 at 9:00 a.m.