Bankrupt Veblen West Owners Plan: Let's Lease It to Ourselves!

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Bankrupt Veblen West Owners Plan: Let's Lease It to Ourselves!

The Veblen Dairy shell game continues. Serial dairy wrecker Rick Millner and fourteen partners have filed a 158-page document with bankruptcy court asking for a chance to reorganize his bankrupt Veblen West mega-feedlot. The plan proposes to allow Vista Family Dairies to lease Veblen West Dairy for $140,000 a month for 15 years. It proposes to pay off all secured creditors over time without interest.

The filing also appears to fit Millner's pattern of using legal and financial trickery to squeeze every penny out of his assets and stave off court and state action that would hold him responsible for his bad business practices. Judge Charles L. Nail yesterday ordered a hearing on the Disclosure Statement and Reorganization Plan be held on November 18... which I take it means the filing by Millner and the Veblen West equity holders has successfully put off the bankruptcy liquidation auction, scheduled for tomorrow, for another five weeks.

And it's just a shell game. Compare the members of the petitioning Veblen West Dairy equity holders with the members of Vista Family Dairies, as listed in the Disclosure Statement and Reorganization Plan: go to Madville Times to see the list of members.

Somehow the court is willing to entertain the idea that the major owners of a bankrupt dairy should be able to lease that failed operation back to themselves... and be able to refinance their loans for longer terms and a lower interest rate.

What's this shell game about? Here's my read from the outside:

1. Rick Millner was able to get his buddies together to form Vista Family Dairies and float the capital to buy back Veblen East and its cattle outright for $23.1 million.
2. Millner's pals are now tapped out and can't come up with the additional $8.7 million to make a minimum bid for Veblen West.
3. Millner thus needs to put the bankruptcy auction on hold while he hustles more investors to back his scheme. Thus, the "lease it to ourselves!" plan.

And all this keeps the dairy in Millner's hands and keeps him from paying the price for his literally dirty business practices.

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The Disclosure Statement includes some other howlers:

1. True to form, Millner blames everyone but himself for Veblen West's troubles. He blames the AgStar receiver for cutting business relationships (including some of the convoluted, boundary-blurring dealings with Millner's affiliate operations in the neighborhood). He blames market conditions and the weather. What ever happened to the capitalist ethos of personal resposnibility?
2. Rick Millner stepped down as Veblen West managing partner in May 2010 to assuage concerns about conflicts of interest. But Millner's partners appointed Michael Wyum in his place. Wyum kept Millner's Prairie Ridge Management as Veblen West's contract manager. Wyum was also Millner's partner in the still-contested shell game that turned MCC Dairy into Veblen West.
3. During an evidentiary hearing in May, Cargill animal nutrition consultant Ian Woods "testified that the conditions at Veblen West are 'excellent.'"
4. The equity owners declare their belief that Veblen West Dairy "is an industry leader, is well-managed, and was operating a clean, orderly and productive dairy operation."

Posted by caheidelberger at 08:16