Farmers sue chairman, others who promoted co-op sale to ADM - Newsline - Archer Daniels Midland - Brief Article

Rural Cooperatives, July-August, 2003 by Patrick Duffey

A group of farmer-investors of the former Minnesota Corn Processors (MCP) have filed a lawsuit against eight former cooperative executives and the former chairman of the board who led the sale of MCP last year to Archer Daniels Midland (ADM), the nation's leading ethanol producer from Decatur, Ill., for $175 million. The former shareholders allege members were told of dismal profit expectations and not informed of how those executives would benefit from the sale at the time of the landslide proxy vote last September. The group is seeking class-action status on behalf of the 5,500 shareholders.

The cooperative was formed in 1980 and originally produced corn syrup and later ethanol. It owned plants at Marshall and Columbus, Neb., and 17 regional storage, blending and distribution stations. In 2000, it became a Colorado limited liability corporation. The conflict of interest suit alleges the executives received substantial payments and bonuses after the sale was completed. In 1997, ADM invested $120 million in MCP when it was on the verge of bankruptcy and gained a 30- percent non-voting interest in the company.