Attorney Joe Peiffer Featured in National Ag Media
Founding Attorney Joseph Peiffer continues to expand his media presence, sharing crucial insights to help farmers and agricultural businesses prepare for the financial challenges ahead. As noted in our previous update, Ag & Business Legal Strategies (ABLS) has been actively featured in agricultural news outlets, offering guidance on debt restructuring, bankruptcy concerns, and long-term financial planning for producers across Iowa, Illinois, and Missouri. Interview with American Farmland Owner’s David Price Joe recently joined American Farmland Owner’s host David Price for a timely conversation about the difficult financial decisions many farmers may face in the coming year. The interview explores rising operational costs, tightening credit, and strategies producers can use to stay ahead of potential financial strain. Watch the full interview and read the complete article here. Joe Peiffer Featured on RFD-TV News Joe was also featured on RFD-TV News, where he discussed key considerations surrounding 2026 operating lines of credit. During the segment, he highlighted the initial steps farmers should take now to strengthen their financial position for next year—along with practical tips to improve approval odds with their lenders. View Joe’s full RFD-TV appearance and article at RFDTV.com. More Media Coverage Coming Soon Stay tuned for additional news features and interviews from Joe Peiffer and the ABLS team. We remain committed to advocating for farmers, empowering them with the knowledge and strategies they need to navigate uncertain financial seasons. If you or someone you know is facing financial pressures—or simply wants to build a proactive plan—contact Ag & Business Legal Strategies today. Our team can help you understand your options and create a clear path forward. (319) 363-1641
When it Comes to Farm Debt – Fish or Cut Bait
Of all the services we provide for farmers here at Ag & Business Legal Strategies, maybe the most important comes first: Helping you honestly assess your situation. Earlier this month several articles and editorials came out of a meeting Arkansas farmers had with their Congressional delegation, requesting federal assistance to save their farms. This is far from the first news of the year indicating rising financial troubles for farmers stemming from several contributing factors: continuing low commodity prices, tariffs and other trade challenges impacting global demand for U.S. agricultural goods, higher input costs, and weather events. Farm bankruptcies (Chapter 12) are up sharply in 2025: There is no shame in filing a bankruptcy if debt reorganization or other measures are no longer sufficient to address your farm’s issues. If fear is holding you back, keep in mind that bankruptcy doesn’t necessarily mean giving up your land or livelihood. Bankruptcy provides an opportunity to force a restructuring of farm debts if the farmer can satisfy the requirements of the bankruptcy code. And the sooner you act, the better your chances are of reorganizing instead of liquidating, or even avoiding bankruptcy altogether. If you are not to the point of considering bankruptcy, but still have worries about your farm’s financial situation, it is better to face difficult decisions and take action now—not later. Indecision is a decision to allow others to make decisions for you. Waiting too long means your bank, your landlord, your vendors, and other people’s attorneys will be calling the shots for you. We want to help you determine your own path as much as possible. How farm history matters Even if your farm or ag business is thriving, it’s worth examining if this is a solid streak or simply a good year. For that reason, every farmer and their bookkeeper should set aside time to review the farm’s finances several times a year. Since harvest is underway and the end of the year will be here before we know it, this is as great a time as any! While quick cash seems an attractive option for desperate times because it’s immediately available and the creditor doesn’t require collateral, the tradeoff is immediate fees and, if not paid back within a short time, compounding interest beyond a normal person’s ability to repay. You can read more of our advice on MCA pitfalls, and better alternatives, here. If you need help assessing your farm’s financial situation, Ag & Business Legal Strategies offers enterprise analysis. This examines the individual parts making up your farm or ag business to show you how each is contributing to profit and loss. Find out more about how this planning tool can save you lots of future time and trouble here. (319) 363-1641 Cash isn’t necessarily financial health Even if you have a positive bank balance, that should not be your only metric for financial stability. Cash on hand doesn’t always indicate profitability, which is tied to management decisions you’ve made that generate income, such as the return on new investment for crops or livestock production. If your positive balance is largely from non-production activities—say, the sale of capital assets (land or equipment, for instance), borrowing funds, or an inheritance payout—you didn’t generate profit. This is important because profit has the possibility of being sustainable, or repeatable. Unless you’ve won a tremendous lottery or your last name is Buffett or Gates, you probably can’t rely on capital gains or a one-time payment as future income. This also applies to cash from refinancing or selling a capital asset, such as taking out a second mortgage. Borrowing and pledging intermediate or long-term assets to make your current situation positive only increases loan payments in future years, further decreasing your ability to cash-flow your operations. We’ve written about profitability versus cash-on-hand in the blog before, which you can find here. The only failure is avoidance This has been a tough year on many farmers, not just in the upper Midwest. With lower commodity prices and higher costs, even if the past few years have been boom, you could be facing difficulties this year in paying all your creditors on time. Whether it’s rent, a bank loan repayment, or what you owe vendors, you need to know who has first security interest in your crops and other farm products so you can structure payments to creditors. In many instances, there will be more claims against the crops and other farm products than the cash from selling those assets. This is another topic we tackled previously, about this time last year. You can read more about collateral, liens, the danger of selling collateral without authorization to pay debts, and how our attorneys can help with negotiations here. If the above is the situation you believe you’ll find yourself in post-harvest, it is time to evaluate your options NOW so you can be proactive in addressing deficits. Ag & Business Legal Strategies has been helping farmers with this problem for many years. One of the reasons we started this blog was to help farmers and small business owners better understand not only the options available to address their financial and legal problems, but how imperative it is to seek assistance as soon as they realize they have a problem. You may have heard that failure to prepare is preparing to fail. We say that failure to make a decision IS a decision—to let others decide for you. Farm debt not dealt with in a timely manner leads to consequences that can range from bad to catastrophic, including added default interest, legal action, seizure of property, and possibly imprisonment for farmers who sell collateral without authorization and do not pay the secured creditor. The earlier you act, the better chance you have to maintain control of decisions over your own future. (319) 363-1641 At Ag & Business Legal Strategies, we want our clients to be honest with themselves and have a solid business plan. Our team will help you create and execute
It’s Farmers Who Suffer the Shortage of Rural Attorneys
Even most attorneys enjoy a good lawyer joke. But there’s nothing funny about the shortage of access to legal representation for rural residents across the United States. And where people cannot find representation, they have a difficult time accessing justice. According to a 2020 survey by the American Bar Association (ABA), there are on average four attorneys per 1,000 people nationwide. If you have a suspicion this isn’t evenly distributed, you’d be right. Think about this: Nationwide, 40% of all counties (and county-equivalents) have less than one lawyer per 1,000 people. Fifty-four counties have no practicing attorneys at all. Earlier this year, while serving on a panel at Washburn University to discuss this shortage and brainstorm recruitment ideas, I met a fellow panelist from northwestern Kansas who is the only lawyer in her county other than its prosecuting attorney. Far from being happy about no competition, she believes the best thing for the county would be for at least one other attorney to set up practice locally. That way, she would not face so many situations in which she has to turn away potential clients because of conflicts of interest from already representing other parties involved. Also, local residents would not always need to travel to another county to hire a lawyer. Representation matters So, why are these “legal deserts” a problem—and why are they a particular obstacle for farmers and small-business owners? Regardless of where they live, everyone deserves access to legal representation and assistance when they need it. Most people hire a lawyer only once or twice in a lifetime for reasons such as divorce, writing a will, mediation, an injury claim, or bankruptcy. But if you’re running a farm or other business, occasions for need of legal assistance are more frequent than for a non-entrepreneur. A business owner works with contracts, business taxes, employees, customers, buyers and sellers, which means bringing or defending potential lawsuits or, sometimes, simply relying on an attorney to negotiate a difficult situation. While large companies typically have the resources to employ attorneys or retain the services of a big law firm, “the little guy” in need of less frequent legal services does not have a staff lawyer. For farmers especially, it is important to have access to lawyers who understand the business of farming, to help their client best navigate complex legal issues as they pertain to agriculture. This includes things like federal farm programs, farm leases and taxes, specialized contracts, ag finance agreements, incorporation papers, farm debt restructuring or bankruptcy, and more. Ag & Business Legal Strategies specializes in representing farmers—and other small-business owners—across Iowa as well as in Illinois and Missouri. Our lawyers and support staff understand the agricultural sector’s needs. We assist many clients beyond our office location, which means we rely on video conferencing in addition to some traveling for in-person meetings and court appearances. After all, the commute for a Zoom meeting is the same no matter where you live! Fortunately, courts accept electronic filing and our staff can assist clients with digitizing any paper documents as needed, allowing capable representation even for clients who live hours away. Need an ag attorney? Understanding the client When an attorney works with ABLS, if they do not already have an ag background like me (my dad was a farmer), I take them to different kinds of local farms so they can learn about cropping and livestock systems. I have even done this with some visiting lawyers. I think it’s critical for a lawyer to develop familiarity with the types of operations they will represent, plus I enjoy helping my colleagues learn the business of farming. Near ABLS’s eastern Iowa offices, legal deserts aren’t as severe as they are in western and northwestern Iowa, but there still aren’t as many attorneys as our state needs. For any profession to flourish somewhere, there must be younger people coming in to replace older professionals as they retire, sell the business, or pass away. But new graduates and other young lawyers in Iowa are moving to larger cities or out of state to work. This isn’t surprising, as many young people want access to more amenities, social networks, and career opportunities than they think rural areas may offer. I found satisfaction practicing law and raising a family in this area because, as a young attorney in the 1980s during the Farm Crisis, I saw where I could really make a difference advocating for farmers facing financial hardship and loss of their land. Even now, there are young attorneys who would like to live in rural areas, but a sense of purpose or attachment to family may not be enough incentive to someone carrying $200,000 in school loan debt, who can earn more in a large city. Some governments and organizations have instituted programs with added compensation for lawyers making even a short-term commitment to small towns. North and South Dakota each provide annual stipends for attorneys who agree to practice in qualifying counties through their Rural Attorney Recruitment Program. The attorney must live in the community for five years and be licensed to practice in that state. Each state’s legislators voted to approve the RARP, which is funded by various parties including benefited counties and state bar associations. The Illinois State Bar Association administers the Rural Practice Fellowship Program, which connects rural law firms looking for law clerks and associates with law students and lawyers interested in practicing in those areas. Associate Fellow Program lawyers are paid a one-time stipend of $5,000 when they begin working in the community, and another $5,000 if they remain for one year. Nebraska offers school loan repayment assistance through its Rural Practice Initiative—attorneys who go into private practice in a community of under 15,000 people can receive up to $6,000 yearly toward their loans, over seven years. In Colorado and Indiana, there is not compensation, but each has programs that match young attorneys or law students with mentors in rural law firms and courts, with an
New Duties: What Tariffs Could Mean for U.S. Farmers and Other Small-Biz Owners
Author’s Note: This is a developing story; as such, some details may have changed from the time this post was written. Consult trusted, reputable news sources for real-time reporting. Last weekend, the United States imposed tariffs on imported goods from major trading partners, including China, Mexico, and Canada. In response, Canada has already imposed retaliatory tariffs and China and Mexico promised similar responses—though as of this writing, tariffs on Mexico are reportedly delayed a month pending a deal with the U.S. What does this mean for farmers and other small businesses? Let’s explore how these tariffs could potentially affect the agricultural and other business sectors. How tariffs work Tariffs are a “protectionist” tax on imports, meaning they seek to protect domestic production and manufacturing industries. By increasing the cost of foreign goods, they are intended to support the purchase of domestic goods. For example, if Canadian lumber costs $600 per thousand board feet but comparable American lumber costs $700, the Canadian lumber would likely be the more attractive purchase. A 25% tariff on Canadian lumber, however, would increase its cost to $750, making the American product cheaper. While this benefits U.S. lumber producers, it also raises the price on U.S. consumers who would have previously paid $600 instead of $700 or more. For decades the trend in global trade—often led by the U.S.—has been toward free trade, with countries agreeing to more bilateral or multilateral treaties to reduce or eliminate tariffs, with the U.S. generally reserving tariffs to address bad trade behavior such as dumping (selling goods below cost to drive competing producers out of business) or intellectual property violations. The U.S. has generally moved away from protectionist tariffs on the condition that other countries do the same. Now it has drastically changed positions with some of its largest trading partners, and those partners are responding in kind. Retaliatory tariffs As of this writing, Canada had announced retaliatory tariffs on U.S. goods it imports, including: Just as U.S. tariffs tend to reduce sales of exports to the U.S., retaliatory tariffs from those countries will likely reduce our sales to them. Moreover, while Canada’s tariffs are (currently) only on specified goods, U.S. tariffs seemingly apply to all Canadian, Mexican, and Chinese imports. These tariffs were imposed under the International Emergency Economic Powers Act, a law typically used to address national security threats through sanctions rather than trade issues. In fact, this is the first time it has been used to impose tariffs. This novel approach will almost certainly result in legal challenges, and while those may take months or years to work through the courts, it’s possible a judge might impose a more immediate injunction preventing U.S. tariffs from going into effect either on a limited basis or more broadly. Finally, the executive orders imposing these tariffs discussed the possibility of increased tariffs in response to retaliatory tariffs. This could be just the first battle in a longer trade war. The economics for farmers, small biz While the tariffs’ most direct impact will fall on businesses that produce, import, or export listed goods, the entire economy will feel their effects. Here are some basic likely outcomes: The economic theory behind free trade is that everyone, overall, does better when countries compete on price without protectionist trade measures. This is tough on domestic producers when foreign producers can out-compete them on cost, and can inspire calls for protectionist policies. In short, free trade does promote wider economic growth, but its benefits are often widely distributed, while its negative effects—such as job losses in some industries—are concentrated. This makes trade policy a contentious issue. For most farmers and other small business owners, the current tariff situation presents challenges. Perhaps U.S. duties will benefit some operations, but many farmers are likely to see increased costs and potentially reduced sales of goods. This economic situation might also reveal underlying fiscal problems in your business. If you are struggling with managing debt, or financial planning, the attorneys and financial strategist at Ag & Business Legal Strategies can help you figure out a plan. Give us a call sooner than later—let’s find out together how we may best assist. (319) 363-1641 At Ag & Business Legal Strategies, we want our clients to be honest with themselves and have a solid business plan. Our attorneys and financial strategist will help you create and execute that business plan, and, if necessary, assist you with the legal, tax, and practical aspects of debt restructuring or bankruptcy. Don’t wait for the problems to become insurmountable. Connect with someone you can trust today, not tomorrow. https://www.ablsonline.com/contact/
What Overturning the Chevron Doctrine Means for Farmers
Last June, the U.S. Supreme Court made a groundbreaking decision in Loper Bright Enterprises v. Raimondo, overturning the long-standing Chevron Doctrine. But what exactly is the Chevron Doctrine, and why does its demise matter, especially to farmers? Let’s break it down. Doctrine’s origins The Chevron Doctrine originated from the 1984 Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. In simple terms, it established a rule for how federal courts should handle cases involving federal agencies’ interpretations of laws passed by Congress. When a federal court reviewed a federal agency’s interpretation of a Congressional statute, the court would defer to the agency’s interpretation as long as it was deemed “permissible.” This deference applied even if the court might have interpreted the statute differently. The rationale behind the doctrine was straightforward: Congress often writes laws that are broad or vague precisely because it’s impossible for legislators to be experts in every field. Federal agencies, staffed by subject-matter experts, were tasked with filling in the knowledge gaps and implementing these laws. The Chevron Doctrine once gave agencies the flexibility to interpret and enforce statutes using their specialized knowledge. But fast-forward 40 years, and the political and judicial landscape has shifted significantly. Falling out of favor Several factors contributed to the downfall of the Chevron Doctrine: Opponents of the Chevron Doctrine argued it allowed agencies to overreach and expand their regulatory powers beyond what Congress intended. With Chevron overturned, these critics hope to see agency authority reined in, making it harder to implement new regulations. This approach relies heavily on Congress to take the lead in crafting detailed laws, but with federal legislators often mired in gridlock, the result is likely to be fewer new regulations—a win for anti-regulation advocates. What did Looper Bright do? In Loper Bright Enterprises v. Raimondo, the Supreme Court officially ended the Chevron Doctrine. The Court ruled that federal courts must now interpret statutes based solely on their own reading of the law, without giving deference to an agency’s interpretation. This decision shifts the balance of power. Courts, not agencies, will have the final say in how federal laws are interpreted and applied. While this may sound like a technical legal change, it has far-reaching implications for businesses, including those in the agricultural sector. Impact on farmers Federal regulations touch nearly every aspect of farming. From environmental practices to tax policies, the rules set by federal agencies can significantly impact farmers’ operations and bottom lines. Here’s how the Supreme Court’s decision could play out: New era for challenging regulations The end of the Chevron Doctrine creates opportunities for farmers to push back against regulations they view as burdensome or unfair. Without the doctrine’s deference, courts are more likely to scrutinize agency decisions, potentially giving farmers an edge in legal disputes. This also comes with risks, however. Agencies may become more cautious in issuing new regulations, leading to delays or uncertainty in areas including environmental protection and farm subsidies. Additionally, reliance on Congress to craft detailed, clear laws could lead to a regulatory vacuum, as legislative gridlock often prevents timely updates to outdated statutes. The Supreme Court’s decision marks a significant shift in how federal regulations are created and enforced. For farmers, this change presents both challenges and opportunities—while it may be easier to challenge unfavorable regulations in court, the lack of agency deference could also lead to greater uncertainty and fewer new rules tailored to the unique needs of the agricultural industry. Your legal advocates The end of Chevron deference is just the beginning of what promises to be a transformative era for agriculture and beyond. As this new legal landscape unfolds, farmers should stay informed and seek legal advice when navigating complex regulatory issues. Ag & Business Legal Strategies is your go-to resource for legal advice, with decades of combined experience among our attorneys specializing in farming and other small-business concerns. If you have a regulatory concern or questions, reach out to us sooner than later! or call (319) 363-1641 At Ag & Business Legal Strategies, we want our clients to be honest with themselves and have a solid business plan. Our attorneys and financial strategist will help you create and execute that business plan, and, if necessary, assist you with the legal, tax, and practical aspects of debt restructuring or bankruptcy. Don’t wait for the problems to become insurmountable. Connect with someone you can trust today, not tomorrow. https://www.ablsonline.com/contact/
Venue Reform & Effects for Farmers
From February 25-27 Joe Peiffer and Mark Kuhn (one of the farmers affected by the VeraSun bankruptcy in Delaware) were in Washington DC for the Commercial Law League of America‘s Hill Day to talk with lawmakers about bankruptcy venue reform. While they were there they spoke with Doug Cooper on The Big Show about their efforts. Here are the interviews: Doug’s interview with Joe: Doug Cooper: Joe Peiffer is an agricultural lawyer from Cedar Rapids. He is with Ag & Business Legal Strategies, and he has been working on a potential bill called the Bankruptcy Venue Reform Act of 2018. I caught up with him in the nation’s capital. Joe Peiffer: Doug, I’m out in Washington, D.C. and I’m out here with the Commercial Law League of America, and we are having Hill Day. The prime issue that I’m here to work on behalf of farmers in general is the Bankruptcy Venue Reform Act of 2018. DC: And that is what? JP: The Bankruptcy Venue Reform Act is S.2282. It was introduced on January 8 by Senator Cornyn, a Republican from Texas, and Senator Warren, a Democrat from Massachusetts, and it will reform where bankruptcies can be filed. Currently, bankruptcies can be filed wherever a company is organized or wherever an affiliate, which is another company in the same group of companies, may file a bankruptcy, or wherever significant assets of a company are located. That’s been a problem for Iowa farmers and farmers in the Midwest in general, as illustrated by the VeraSun bankruptcy in 2008. DC: Remind us what happened there. JP: In VeraSun, the bankruptcy was filed on October 31, 2008 in Delaware. VeraSun was the world’s largest producer of ethanol at the time, had 23 plants in 6 states, and filed bankruptcy in Delaware. I checked: Delaware had no ethanol plants and still has no ethanol plants. The farmers had contracted to sell grain to VeraSun, and the market had dropped out and VeraSun had agreed to pay in many instances $7 or upwards of $8/bushel for grain, and it had not protected itself on the other side in the options market. It ran out of cash, so all the sudden it’s got all these contracts due, it files bankruptcy so it has the right to terminate those contracts, and by terminating, the farmer would be free to sell their grain wherever. Unfortunately, they don’t have to assume or reject those contracts until after a plan is confirmed. That could be many months later. In 2008, you’ll probably recall that in the fall, we had grain in the neighborhood of $5/bushel and it was dropping. The farmers were faced with a terrible problem. If they sold their grain to minimize their loss, that was good. They could at least get $5/bushel for their corn, but their concern was what if the market turns and it goes back to $7? So the contract was at $7 and they sold for $5, now that covered their loss, but then if it goes back to $7, VeraSun could’ve required them to cover the difference between what they sold it for and what the market had returned to on the contract. For example, if the farmer who had a contract to sell with VeraSun for $7 and ended up selling at $5 after the bankruptcy, and then it went back to $7, he could have to pay $2/bushel, which means he effectively got $3/bushel for his corn. DC: What kind of reaction have you received in Washington, D.C., and what is the current status of this bill? JP: I’ll start with the current status. The current status of the bill is that it’s in the Senate Judiciary Committee. We are building support, and in fact, I just came out of a meeting with the National Association of Attorneys General, who happen to be having their annual convention here. And we’re hopeful that that group will support it. We’re getting support from many different factors, or many different groups, the Iowa Bankers Association signed on right away, and what we’re hoping to do is to keep building that support. One of the things you need to think about right now is that Ted Cruz is railing against renewable fuel standards. He’s pointing out the Pennsylvania Energy Company bankruptcy, which is a refinery that filed bankruptcy in Delaware recently, saying the employees there are in trouble because of the renewable fuel standards, which is part of the basis of the ethanol plant. If he’s successful, there could be ethanol plant bankruptcies coming up, and under the current bankruptcy laws, I can virtually guarantee they’re going to be filed in either the Southern District of New York or Delaware. If we don’t want that to happen, now’s the time to act. People out here are generally receptive to the idea, with the exception of folk from Delaware or New York, who are getting the bulk of the cases. I was out here in 2008 with Mark Kuhn, and we went to Delaware in the VeraSun bankruptcy, and Mark pointed out he was the only one in the room with blue jeans on. Everybody else had blue suits on. And we could not get the judge to agree that VeraSun should be required to assume or reject the contracts quickly. In fact, all of the farmers that had VeraSun contracts were invited to come to Delaware to seek relief. How many farmers A) can afford to make it to Delaware, B) can afford to hire Delaware counsel, and C) should have to go that far to protect their interests? DC: Joe, it’s early, but what’s your gut feeling? JP: Gut feeling is momentum is building, but it’s a marathon. It’s not a sprint, and we need the support of people who are affected. Not just farmers – it’s other businesspeople that dealt with these companies as well. Because the next one that happens will affect anybody that’s doing business with the companies. DC:
Joseph Peiffer on the Big Show Talking Venue Reform (Part 2)
Joseph Peiffer joined Doug Cooper on the Big Show again last week to talk about the new Bankruptcy Venue Reform Act of 2018 that was recently introduced in Congress. Here’s part 2 of their conversation from January 18, 2018. Doug Cooper: Yesterday I visited with Joe Peiffer, a bankruptcy lawyer with Ag & Business Legal Strategies. He has been working on a bill, the Bankruptcy Venue Reform Act of 2017, that would reduce the number of miles you would have to travel to argue your case if a corporation or business declares bankruptcy. Joe Peiffer: In many instances, they’ll make a deal and pay something for certainty to make sure they’ve gotten rid of the claim of the creditor, despite the fact that they may have good defenses. The cost of hiring Delaware counsel is high, and you always have the uncertainty. Conversely, if you were in the Midwest, and that’s where the case is filed, the cost of defending yourself is far less. DC: Joe, let’s do a little Civics 101 right now. What are some of the hurdles the bill has to go through before it becomes law? JP: Okay. At the current time, the bill has been introduced and was assigned to the Senate Judiciary Committee. The Senate cannot act on it until it comes out of the Judiciary Committee. So at the current time we’re seeking to get lots of senators of both parties to say this is a good bill. If that occurs, then the Judiciary Committee could agree to suspend regular order and report the bill out of committee. Once a bill’s out of committee, it could be added to any other bill and potentially get wings and go through the Senate. Once it’s through the Senate, then it will go to the House. Assuming it ends up being part of a bill that’s identical in both the House and Senate versions, and it’s passed, then it will go on to the President. Something else that could happen in here is that the House could introduce companion legislation through its Judiciary Committee. I believe it’ll be a lot easier to get this bill passed through the House because you don’t have to worry about getting 60 votes, and if that were to happen, then the Senate could take it up, because it had been passed by the House. So we’ve got several ways of getting to go in this. Right now, it’s in the Senate Judiciary Committee. DC: Seems to me that the chair of the Senate’s Judiciary Committee, Chuck Grassley, would have interest in this. JP: I won’t get to talk to him this week. I am talking – I have spoken with his Judiciary staff person, Brad Watts, and he is assigned to handle bankruptcy matters for Senator Grassley. And he is watching this carefully. I’ll be meeting with Senator Grassley’s staffer, Mr. Watts, I believe on Friday. I happen to be going to D.C. for another matter, so I’ll be working the Hill while I’m there. If we can get both of our senators and all of our representatives to be on board, to press this legislation, which is, I believe, good for not only Iowa farmers, but all of Iowa’s citizens by virtue of making certain that if any bankruptcies are filed that involve us with Iowa-based companies or Midwest based companies, that the bankruptcies are filed close to home. DC: What’s your gut feeling at this point? JP: My gut feeling is that if the grassroots gets to work on this thing and supports it, it could become reality. If the grassroots doesn’t get out there and keep pushing their senators and representatives, it could die in the Senate Judiciary Committee. For example, we talked about Chapter 12 bankruptcy changes last fall. It took five and a half years after the Supreme Court handed down a case decision that went against the family farmer for the bill to finally get passed and enacted as legislation. It has taken – I’ve been on the Commercial Law League of America Bankruptcy Venue Reform Committee for over five years. This is the first time that we’ve gotten legislation introduced. That’s a big step, but we need a big push and a lot of help from a lot of people calling their senators and representatives, telling them to support this if we’re going to get it across the finish line. DC: Any final thoughts, Joe? JP: Well, the other thought would be if you support this legislation, be active. If your senator or representative doesn’t call you back or give you a response, call them again. E-mail them again. If you become the squeaky wheel, they recognize who has the power at the ballot box, and that’s the citizens. It’s important for the citizens of the states to be heard because the other side is very well funded, but the other side that has a lot of lobbyists going, they don’t get to vote here. The voters can speak loud. If the voters speak, it’ll outweigh the money that may be offered to them by the other side. DC: Joe Peiffer is a bankruptcy attorney with Ag & Business Legal Strategies in Cedar Rapids, Iowa. I’m Doug Cooper on the Big Show.
Joseph Peiffer on the Big Show Talking Venue Reform (Part 1)
Joseph Peiffer joined Doug Cooper on the Big Show again last week to talk about the new Bankruptcy Venue Reform Act of 2018 that was recently introduced in Congress. Here’s part 1 of their conversation from January 17, 2018. Doug Cooper: Joe Peiffer with Ag & Business Legal Strategies in Cedar Rapids, Iowa is a bankruptcy lawyer and he says the first step in solving some bankruptcy venue issues has been introduced in Congress. Joe Peiffer: The Bankruptcy Venue Reform Act of 2018 was introduced on Monday, January 8, 2018, by Republican Senator John Cornyn and Democratic Senator Elizabeth Warren. It may sound like the strangest of bedfellows with Republican Cornyn and Democrat Warren; however, the best chance of getting anything done in Congress right now is to have bipartisan support. Senator Cornyn is a ranking member of the Senate Judiciary Committee. Senator Warren is a rising Democratic star. Getting them to work together is very good for this legislation. We spoke about this legislation before Christmas, since we thought it would be introduced then, and it ended up being introduced shortly after Congress returned from its Christmas break. DC: Did they make any changes to it, Joe? JP: They have made only cosmetic changes. The substance of the bill is exactly like we were talking about back in December, but since it’s been filed we’ve had some really interesting developments. The people from the State of Delaware are incensed that we would do this, or have this bill introduced, and they say that our argument that having bankruptcies filed either where the headquarters of the company is or where the principal assets of the company are would promote better access to justice, they claim is false. They say that the judges in the rest of the United States are not prepared or equipped to handle large bankruptcy cases. I find that argument to be a condescending slap in the face of every bankruptcy judge that isn’t in the State of Delaware or the Southern District of New York. All of the bankruptcy judges before whom I have appeared are smart people who have worked hard to get to where they’re at and who would quickly learn what needs to be done in a larger case. DC: Do you think you’ve got enough votes? JP: Well, at this point we’re trying to garner more votes. It’s much easier to get people to support a concept or a bill after the bill has been introduced. Before it’s introduced, we’re talking about a concept, this is our idea of what we’d like to do. Now we have concrete language that folks can look at and see exactly what’s being proposed and why it’s being proposed. We’re building support around the country. It is important, if people are interested in having bankruptcies of companies be filed where the assets are or where the headquarters are, that they let their congressmen know about it, let their senators know, ask their congressmen to support this legislation to potentially introduce it in the House and the senators to co-sponsor it. It’s going to be a long, hard slog because the folks on the other side are very well armed. From 2003 to 2016, the State of Delaware ended up getting 735 Chapter 11 bankruptcies of companies that had no effective business ties to the State of Delaware. Those are companies that might have been from California, from Iowa, from Washington, even from Alaska or Hawaii. I was looking at a case called Lilly Robotics. It was filed in late February of last year. Of the 30 largest creditors, 20 were from the State of California, yet it was filed in Delaware. When cases are filed in Delaware or the Southern District of New York, retirees have to seek to go to New York or Delaware to find out what the Court may do to their retirement benefits. Farmers, like the farmers in VeraSun, could have to go to Delaware to see if they can get their contracts released so they can sell their grain. The involuntary creditors, like the person that extends some credit to a company, like the guy on Main Street that perhaps is selling to the company and didn’t get paid on time could be hauled off to the court in Delaware or New York on a preference theory saying that well, you got paid a little late and the payment you received within 90 days of filing the bankruptcy is a preference. That becomes an economic burden and hardship for the people that are drug halfway or all the way across the country to defend themselves, and in many instances they’ll make a deal and pay something for certain, either to make sure they’ve gotten rid of the claim with the creditor despite the fact that they may have good defenses. DC: Joe Peiffer with Ag & Business Legal Strategies in Cedar Rapids is a bankruptcy lawyer. I’m Doug Cooper on the Big Show.
Doug Cooper and Joe Peiffer on Venue Reform
Doug Cooper recently visited with Joe on the Big Show regarding Bankruptcy Venue Reform. Part 1 (Aired December 18, 2017): Doug Cooper: I’m going to visit today with Joe Peiffer, he’s a lawyer with Ag & Business Legal Strategies, and he says this week he is hoping to get a bill on the floor of Congress called the Bankruptcy Venue Reform that he says will benefit farmers, employees, and creditors of companies doing business in Iowa by limiting the choice of place where bankruptcies can be filed. Joe, give us some background on this. Why is it needed? Joe Peiffer: There’s a move afoot in Congress, and I’ve been working with a group of attorneys and Congressmen from all over the country to change where bankruptcies can be filed. I suspect that there are a lot of the listeners who remember the VeraSun ethanol plant bankruptcy that was filed in 2008. VeraSun had 26 ethanol plants in six midwestern states. Yet, it filed its bankruptcy in Wilmington, Delaware. DC: What difference does that make, and why Delaware? JP: It filed there because it had one of its affiliates, which is like a brother or sister corporation, that was incorporated in Delaware. Then, it could file every other affiliated business in Delaware because it had filed one there. It could properly file, and you can at this time, properly file a bankruptcy where a company is organized, which is where you incorporate. And then, any other brother or sister company, or parent or subsidiary, can follow whoever filed first. In VeraSun, every plant had a separate company. So, because every plant had a separate company, all they needed to do was have one that was organized in Delaware and then every other one could follow it to Delaware. Now, that affected an awful lot of farmers in the Midwest. I put together a short video because I had the privilege of representing over 100 farmers in the VeraSun bankruptcy. In VeraSun, the farmers had contracted to sell grain at very high prices. Unfortunately, the market turned. After the market turned and VeraSun hadn’t properly hedged its supply, it ended up in a cash crunch so it filed a Chapter 11 bankruptcy. Well, in that bankruptcy, all of the contracts that were out there with the farmers to supply grain were still enforceable by VeraSun, even though most of them were out of the money. You might have a contract for $7.00 corn and corn was $5.50. Common sense tells that the ethanol plant isn’t going to agree to pay you $7.00 when the going price is $5.50. The company did not have to reject your contract or let you out of it until it finished its bankruptcy plan. You don’t have to file a Chapter 11 bankruptcy plan for up to 120 days, sometimes that’s extended. So now all of the sudden, we’ve got farmers with contracts out there that VeraSun cannot be forced to honor but then if the price comes back and VeraSun’s in the money, VeraSun could make the farmer honor it—one sided as heck. So the farmers that I represented hired me to go out to Delaware with a farmer, Mark Kuhn, and we went out to seek, ask the judge whether we could speed up the process of VeraSun agreeing to accept or reject these contracts. So we wanted to do it on a plant-by-plant basis, so that we look at the Charles City plant, or we’d look at the plants up in Minnesota, on a plant-by-plant basis and have all the farmers that had contracts there ask the judge at one time to set up a mechanism to make them assume or reject the contract. The judge wasn’t interested. The judge said that every farmer could come out to Delaware and seek his assistance. Well, to me, it becomes a question of what’s the access to justice, because now you’ve got all of the people that had done business with the ethanol plants are out here in Iowa, Minnesota, Nebraska, the Dakotas, I can’t think, there were a couple in Michigan that were being called out to Delaware. When you go to Delaware, I’m not admitted in Delaware, so in order for me to appear in Delaware, I had to hire a lawyer to review everything I was doing and then to be in court with me to introduce me to the judge and ask the judge for permission to allow me to talk. You know, Delaware is a long way from Charles City, Iowa, so what we’ve been doing is working to see if there’s a way to make this more fair and to provide people with better access to the courts. And so what we’ve come upon is some language in a bill that we believe is going to be introduced Wednesday. It’s called the Bankruptcy Venue Reform Act of 2017. So, what I am asking people to do, then I’m going to ask farmers who believe like I do that it’s important that bankruptcy be filed close to where the creditors are and close to where the companies are doing business to support this. Call your senator. Ask your senator to support the bill and to co-sponsor it. Call your representative. Let them know that this bill’s coming, that you’re supporting it, that you want them to support it, and hopefully Congress will actually work quickly and do something. DC: Joe, it’s the holiday season, the tax bill is being debated, what are the odds do you think, it could get done before Christmas or before the end of the year? JP: I’m told there is an outside chance that it could get attached to the budget bill next week. I’m a realist, it probably won’t get done. But if we provide Congress with a lot of people calling in, emailing them, or even writing, my preference is that you, instead of write, that you email or call and tell them
Thirty Years of Asking
Joe Peiffer recently wrote an article for the American Bankruptcy Institute Journal entitled Thirty Years of Asking, “Are We There Yet?”: Congress Rights a Taxing Wrong in Chapter 12. Click the thumbnail below to read the entire article: