Get Up to Speed: Potential Laws for You, Your Farm, Your Business
Call your Iowa State Senator by February 20 The bulk of our work at Ag & Business Legal Strategies is focused on helping farmers navigate complex court processes in bankruptcy, as well as laws and regulations that affect their livelihood. But our attorneys also devote time and expertise to working with state and federal legislators to try improving laws that govern these, as well. Ultimately, lawmakers serve you, the people. So from time to time, we like to update you on pending or potential legislation that could impact your daily life at some point so that you may reach out to your elected representative and share your opinion. File the first two items in this article under “Needs Attention NOW.” Updating for inflation in Iowa Last year we worked with an Iowa state lawmaker on draft legislation to better assist farmers and other small business owners seeking debt solutions by updating Iowa’s exemption laws for inflation. We explained what that means, and how it would help struggling parties protect more of their property, in this article. That legislation was introduced in the Iowa Senate last month and was assigned to a subcommittee of the Judiciary Committee. Not only would it bring up to date long-overlooked indexing, going forward it would require periodic indexing every three years. The subcommittee has recommended that the main Committee vote Senate File 2054 out to the full Senate for debate and consideration. Here is what’s needed: If the Judiciary Committee does not vote on this by February 20, 2026 (later this week, as of this publication), it will become much more difficult to get the bill to the Senate floor for a vote this year—if at all. If you’re in favor of fair protection for debtors while supporting economic recovery in the debt reorganization/bankruptcy process, contact your State Senator TODAY and ask that the Committee vote on S.F. 2054 by February 20. If you don’t know your Senator, find them here. ABCs of business liquidation In addition to farmers, we also advise small business owners. Section 681 of Iowa Code governs assignment for benefit of creditors, commonly referred to in legal circles as ABC. The concept has been around for centuries, crossing from common law of England to the U.S., and allows a failing business to close efficiently and the owner(s) to maintain credibility by liquidating assets to pay its creditors. This process happens largely outside of court supervision, saving court expenses and potential time delays related to oversight. Used efficiently, ABC lets a business owner transfer its assets to a neutral third party, whose job is to sell them and recover the best prices to pay creditors. When the state enacted its current ABC laws in Iowa Code Chapter 681 more than a century ago, it imposed significant court oversight and bonding requirements. The bond requirement has historically proven onerous and expensive, crippling this tool—in fact, the last case we can find using this was in 1949. Because ABC liquidation can be a more affordable alternative to bankruptcy when a business owner is not trying to reorganize to stay in business, we have been working with Iowa legislators to overhaul this state law. Senate File 2213 would do that, repealing Section 681 and replacing it with more modern, uniform language recently drafted and also under consideration in other states. UPDATE: The Governor signed the final bill, SF 2497, into law on June 2, 2026 As with the above-mentioned S.F. 2054, this bill has been recommended by the Judiciary Committee’s subcommittee for passage, so the full Committee can take it up for consideration. It too must be voted on by February 20, or it may be difficult-to-impossible for the full Senate to vote on this year. Contact your State Senator to request a Committee vote before February 20. Protect farmer safety, legal relief Recent approval of the use of dicamba herbicide by the U.S. Environmental Protection Agency (EPA) puts us in mind of an effort from the past two years, in Iowa, to nullify farmers’ rights to sue for relief if harmed by pesticides. In 2024 and 2025, the Iowa Senate voted twice to approve a bill that stated if the EPA approves registration of a pesticide under the federal Insecticide, Fungicide and Rodenticide Act, that “shall be sufficient to satisfy any requirements for a warning or labeling regarding health or safety” for its use. And twice, the Iowa House refused to make it law. Although we are not aware of any effort yet so far this year to revive the bill, it’s never a bad idea to get out ahead of potential action and let your legislators know that you are not in favor of taking away a farmer’s right to sue for injury from something they may be required to handle on a regular basis. Why it matters: Several years ago, Ag & Business Legal Strategies had a client who grew very sick and nearly died when he was mixing a pesticide and some landed on his skin. It turned out that in the 1980s this chemical had contained a “loud” dye so the user could more easily see if it was applied or spilled, and caused it to sting so the user could wash it off promptly. By the early 2000s, however, the dye and warning sting had been eliminated. The Eighth Circuit Court ruled this elimination a design defect that was an exception to how the EPA had registered the pesticide, and the farmer prevailed. EPA registration of a pesticide is predicated on how well it works for your crops, which has nothing to do with how safe it may be to use. Manufacturers and others will argue lawsuits raise the price or make approval a longer process. We ask: At what price do you really need those chemicals if they’re not going to be safe for everyday handling and exposure? Federal bankruptcy goals Next month, Ag & Business Legal Strategies Founding Attorney Joe Peiffer is headed to Washington, D.C.,
Keeping Up With the Times: Indexing Exemptions to Inflation
When the Bill of Rights amending the U.S. Constitution went into effect in late 1791, the Seventh Amendment stated in part that “the right of trial by jury shall be preserved” for “the value of controversy” over $20. This meant that anyone could demand a civil jury trial for a dispute involving something exceeding that value. That $20 in 1791 is worth about $700 today. But since the Seventh Amendment isn’t indexed for inflation, anyone can still demand a jury trial for a dispute of over $20. Indexing just means adjusting for inflation over time. One place most of us see this in action is when completing our federal tax returns each year. You may notice the “standard deduction” that applies if you do not itemize your deductions throughout the year (as most individuals don’t). This, coupled with shifts in income brackets from year to year, aims to fairly adjust the taxes you owe so you’re not penalized with a higher tax rate if your income only rises at the same rate as the cost of goods and services. Your buying power isn’t increasing — so your tax rate shouldn’t, either. So how does indexing apply to bankruptcy and debt collection? Personal property exemptions By and large, the legislators who write bankruptcy and debt collection laws recognize that while it’s important for filers to repay debts, it’s also vital that they not be left destitute with no belongings. Federal and state bankruptcy laws contain exemptions from debt collection for things like homes, vehicles, clothing, household goods and furnishings, some cash, retirement accounts, and more. There are several reasons for this. Stripping someone of all assets to satisfy debts, including tools of their trade, a means of travel, a place to live, everyday supplies, and all cash could make it difficult for them to reasonably support themselves, which in turn costs society in public assistance and reduced economic productivity. It’s in our collective interest for debtors to be able to live their lives even after creditors have collected their debts. The law also recognizes the dignity of keeping certain possessions, with exemptions for valuables such as wedding rings, books, and similar things with a sentimental value greatly exceeding their typically marginal market value. This article will focus on personal property exemptions, or everything that’s not real estate. Iowa generally offers robust personal exemptions — in addition to the categories above, the state allows debtors to protect their interest in disability income, veterans’ benefits, alimony, firearms, 529 college savings accounts, structured personal injury settlements, federal pensions, medical aids (why take someone’s CPAP or walker?), and internment spaces from creditors. In many cases, however, Iowa has not kept up with the times, and decades of inflation have eroded the value of the exemptions the state legislature granted to debtors. Inflation indexing: Not new, but not common The federal Bankruptcy Code and at least eight states index personal property exemption values for inflation, but as in most states, Iowa has not done this. When they have been updated, Iowa lawmakers have generally set fixed dollar amounts that remain unchanged until the next legislative update. The most recent update to any Iowa personal property exemption values was nearly 20 years ago, and others go back even further. One exemption, for a bankruptcy debtor’s interest in accrued wages and tax refunds, has not been updated since 1981 — the Iowa legislature set that exemption at $1,000 and it remains the same today. Had it been indexed for inflation according to the U.S. Department of Labor’s Consumer Price Index (CPI), that exemption would now be more than $3,600! For a more concrete example, consider Iowa’s motor vehicle exemption. In 2006, lawmakers updated the exemption for a motor vehicle to $7,000; with a CPI-indexed update, that amount would be close to $11,150 today. Inflation’s effects on this exemption are real — in researching Iowa’s exemption history, I found a Cedar Rapids Gazette classified ad from 2006 that listed a 2001 Grand Caravan with 103,000 miles for $7,000. Right now, Kelley Blue Book states a 2020 Grand Caravan with 103,000 is worth around $11,230 — not far off from an inflation-indexed exemption of $11,150. Because of inflation and the fixed value of Iowa’s motor vehicle exemption, the vehicle a debtor could exempt today is likely to be in significantly worse shape than the vehicle they could have exempted when the law was passed, since $7,000 doesn’t buy the same used car it did in 2006. Inflation devalues other exemptions too Other categories last updated in 2006 were post-marriage wedding/engagement rings, $7,000 (which would index in 2025 to $11,150); jewelry other than wedding/engagement rings, $2,000 ($3,175); household goods and furnishings, $7,000 ($11,150); and “wildcard” or otherwise uncategorized items often used for cash, $1,000 ($1,600). The residential rental or utility deposits or prepaid rent exemption of $500 was last updated in 1996 — this allows a debtor to keep up to $500 of cash deposits or paid-ahead rent on an unexpired lease. This is the amount they do not have to turn over to a bankruptcy trustee or a creditor’s garnishment. However, if the law had included CPI indexing, that exemption would now be $1,025. Other Iowa exemptions include: The last two are particularly relevant to farmers. The farming tools exemption is obviously a benefit to them, but many also work on the side in construction, trucking, manure hauling, or another job. Farmers with a side business can use the non-farming tools of the trade exemption in addition to the farming tools of the trade exemption. I recently had a bankruptcy client who was both a farmer and did construction, so he was able to take advantage of the $10,000 for what he used in each category. If Iowa law indexed exemptions for inflation, my client could today exempt up to $28,800 each for farming tools of the trade, and non-farming tools. See what a difference indexing makes? Indexing for inflation makes sense While nobody likes to think about it,
Influencing Legislation: Putting Your Voice to Work for Laws
Be honest: What comes immediately to mind when someone talks about how Congress makes a law? For generations of Americans it’s the 1976 “I’m Just a Bill” episode of Schoolhouse Rock. It was a catchy introduction when we were young, but we soon learn there’s much more to the process than, “He signed you, Bill! Now you’re a law!” Your participation in democracy doesn’t have to end at the ballot box. You can tell your legislators what laws you’d like to see, or which you oppose. There’s an old saying that “if you don’t vote, you can’t complain”—the same could be said of legislation that passes, if you don’t share concerns with your members of Congress. My hope here is to help you effectively do that and feel comfortable doing so. If you already know the finer points of crafting legislation, you may want to skip over this next section. For everyone else, here’s a quick overview of lawmaking at the federal level. Journey from bill to law Any legislator can create and introduce a bill in their chamber of Congress, the Senate or House of Representatives. It is then assigned to the proper committee, which may hold hearings, conduct research, and possibly rewrite parts of the bill. If the bill is to advance and not just languish in committee, it needs to be voted out of committee to the full Senate or House—where the Speaker of the House or the Majority Leader of the Senate can decide whether to allow it to come to the floor for debate and a vote. The committee could alternately decide to just study the matter longer, or vote to kill the bill. One note on the above is that bills that expressly require federal funding must start in the House. Once on the full House or Senate floor, a bill can pass to the other chamber after it receives a majority of “yes” votes—51 in the Senate or 218 in the House. There are some rules unique to the Senate, however, that can put a snag in this process. One is the fact that any Senator, for any reason, can place a hold on legislation and prevent it from coming to a vote. Another rule is the filibuster, which is designed to delay the voting process. Under filibuster, a member can talk on the Senate floor as long as they like, about the bill or any topic, and no vote can be taken until they are finished. Cloture is a way around the filibuster—if a Senator invokes cloture and at least 60 members vote to agree on that, it ends all debate, filibusters, and holds and forces another vote on the bill itself. Probably the latest example of cloture at the writing of this article was on March 14 when several Democrats joined Republicans 62-38 to force a vote on the stopgap spending bill to avert government shutdown. For the sake of argument and to keep this short, let’s say the House or Senate does approve a bill and sends it to the other, but the second chamber makes some changes to pass it. This creates two versions, which must go to a reconciliation committee made up equally of Senators and Representatives. If they can agree on a single compromise version, that’s what goes back to both House and Senate for votes. Once both chambers have approved the same language—whether on first pass or through reconciliation—it goes to the White House, where the President has 10 days (minus Sundays) to sign it into law or expressly veto it and state their objections. If they fail to sign or veto the bill in that time, it automatically becomes law. A vetoed bill that can win a two-thirds “yes” in each chamber (67 in the Senate, 290 in the House) will become law… but this doesn’t happen often. One more note about veto power: If Congress sends the President a bill but adjourns before the 10 days is up, making the President unable to return an express veto, he or she can do nothing and kill the bill with a pocket veto. Congress can’t override this type of veto, so the process would need to start all over again with the introduction of a new bill. An example of ongoing advocacy For more than 30 years, I have been involved in federal legislative efforts both as a concerned citizen and an attorney who represents farmers. I have had successes, such as when I helped write legislation for Chapter 12 bankruptcy that addresses farmers’ unique concerns. And then there are issues that take longer to solve, which I continue to work on with legislators. One longtime cause is venue reform for bankruptcy cases. I believe large companies filing Chapter 11 bankruptcy should be required to do so in the court closest to where they conduct business, but there is a loophole in federal law that permits them to set up subsidiaries in other states with courts historically sympathetic to the specific relief the corporation desires. Having that subsidiary organized in a favored state allows not only the subsidiary to file there, but by extension, the parent corporation to be able to do the same—often far from their creditors. This tactic has been used to deny farmers and other creditors fair payment for supplies and services when massive corporate assets are liquidated. It happened when ethanol manufacturer VeraSun Energy, headquartered in Sioux Falls, South Dakota, filed its Chapter 11 bankruptcy in 2008—in Delaware, a state notably lacking in ethanol plants or cornfields—leaving many Midwest farmers with grain contracts holding the bag. Just last month, crop ag-tech firm Benson Hill headquartered just outside St. Louis filed its Chapter 11 in faraway Delaware, as well. Why is this issue important to farmers? Bankruptcy proceedings happening several states away discourage creditors who can’t take the time or afford to travel from attending to testify or observe. Also, if I’m representing an Iowa farmer in a Delaware courtroom, we need to hire an extra lawyer who is licensed in that state
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/
Right-to-Repair: Equipment is Only Yours Until it Breaks Down
It’s spring planting season, and every farmer is eager to get into the field as soon as conditions allow. No one wants to watch their neighbors planting acre after acre while they’re stuck in the machine shed with broken equipment. With the increased technological sophistication of farm equipment, however, repairs are no longer as simple as a few wrench twists or some baling wire. Can you or your local independent mechanic fix your equipment yourself, or is your only option to go to the dealer’s service center to get it repaired on the service center’s timeline—and at whatever price it may choose? The answer to that question might depend on right-to-repair. The right-to-repair movement in farming seeks to ensure that farmers and independent mechanics have access to the parts, tools, software, and information they need to repair farm equipment. It’s one aspect of the broader right-to-repair movement that spans from cars (where strong right-to-repair laws already exist) to consumer technology such as phones and tablets. Especially given the increased technological complexity of modern farm equipment, without access to the right parts, tools, software, and information, it can be impossible to fix a newer tractor or other piece of farm equipment. This rubs self-sufficient farmers the wrong way. If you’re handy and used to fixing things yourself, or if you have a favorite local mechanic who treats you right, the idea that only the dealer is able to fix your equipment is revolting. It’s your equipment—but if you can’t repair or modify it to suit your needs, then it doesn’t quite feel like it’s your equipment. While manufacturers certainly enjoy the profits they earn from repairs, they tout safety, sustainability, and innovation as justifiable reasons to restrict repair rights. Of course, these same issues could have been raised about farmers’ ability to repair and modify their equipment before manufacturers began restricting repairability, but manufacturers only raised these arguments after proprietary technology gave them the ability to impose these restrictions. Cars have similar safety, sustainability, and innovation concerns as farm equipment, but car right-to-repair laws have not resulted in unsafe, polluting cars harming society while innovation in new vehicles stagnates. In short, manufacturers’ arguments against farm right-to-repair appear to be pretense for maintaining profitable monopolies on repair services. Legislation vs Memorandums Farmers and their allies are pursuing improvements in farm right-to-repair through several avenues. In 2023 more than 30 state legislatures, including Iowa’s, considered right-to-repair legislation (some including and some excluding farm equipment), but right-to-repair legislation was only enacted in Colorado. On the national level, Congress considered the Fair Repair Act in 2021, but it did not pass, highlighting the difficulties in the ongoing struggle against repair monopolies. Outside of legislation, the Farm Bureau has negotiated memorandums of understanding (MOUs) with five of the largest equipment manufacturers to give farmers and independent repair shops access to information, tools, and parts to enable them to repair those manufacturers’ equipment and find equipment breakdown solutions for farmers. Those MOUs came into effect at various dates in 2023, and it is not yet clear what effect, if any, they have had on breaking the manufacturers’ repair monopolies. Finally, several farmers have sued John Deere in federal court, claiming its restrictions on right-to-repair violate federal antitrust laws. Those cases are part of multi-district litigation that has been in progress for nearly two years now, and resolution does not appear imminent. What’s a Farmer to Do? First, get your spring planting done! If you run into breakdowns, have right-to-repair in the back of your mind as you get your equipment back up and running. Would this have been cheaper, easier, or faster if I or my mechanic had better access to proprietary parts, tools, software, and information? When you have a chance, test out the Farm Bureau’s MOUs. Can you actually get the parts, tools, software, and information to allow you to repair your own equipment if you ask these manufacturers? Can your local mechanic? More generally, contact your legislative representatives, both state and federal, and encourage them to support right-to-repair laws and break repair monopolies. Without legislation, progress on right-to-repair depends on the continued goodwill and cooperation of equipment manufacturers. At any time those that have signed MOUs could withdraw from them and stop cooperating, or even stop complying with the MOUs without withdrawing from them. The MOUs also do not bind any manufacturer that has not signed one. Only state or federal legislation can fully protect your right-to-repair. If you have the opportunity to test one or more of the Farm Bureau’s MOU agreements, we would like to know the outcome of your experience! Please call or text our office, or drop us an email through our website link below. (We will keep your identity anonymous, if you wish, should we publish a later update to this blog entry and cite your account in it.) 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.
Joe Peiffer Discusses Cash Flows on the Big Show
Doug Cooper: Joe Peiffer is a bankruptcy lawyer with Ag & Business Legal Strategies in Cedar Rapids and Joe, we’ve been talking about a number of things and a couple of things slipped through last congress and didn’t get done. One of those was the debt increase on Chapter 12. What’s the latest? Joe Peiffer: Well, Chapter 12, we’ve been talking about Chapter 12 for a long time and the debt limit in Chapter 12. And the debt limit raised a little bit the first of April. The current debt limit for Chapter is $4,411,400. Strange number because it’s only indexed for inflation. Back from 1986 when it was started at $1,500,000 till now. The last congress, Senator Grassley and Senator Klobuchar from Minnesota introduced a bill called the Family Farmer Relief Act of 2018, that was in December, it didn’t go anywhere. On March 27th of this year they introduced the Family Farmer Relief Act of 2019, S897 and it now has 11 co-sponsors and a companion bill has been introduced in the House, HR2336. HR2336 and S897 would increase the debt limit for Chapter 12 to $10,000,000 and continue the indexing. I recently heard something on US Farm Report and John Phipps was decrying increasing the debt limit for Chapter 12, saying it doesn’t provide a fresh start and indicating that perhaps whenever a creditor is listed in a bankruptcy, be it a fertilizer supplier or feed supplier, that the price for that goes up for everyone else. Well, there probably is a situation where people do build in a loss, an allowance for bad debt or loss in their cash flows for these companies, however it doesn’t matter whether it’s a Chapter 12 bankruptcy or a Chapter 7 bankruptcy that’s filed, if the debt’s uncollectible, it’s uncollectible and that really is a hollow reason not to allow Chapter 12 to increase the debt limit so that farmers can use Chapter 12 to get a fresh start, including not having the staggering tax bill that many of them are going to have. It seems right now that we have the never ending trade war and with that trade war going on perhaps farmers are becoming additional collateral damage. I understand the President seeking to ease those losses, but at the same time as he says he’s going to buy product, are we really getting what we need? I don’t know the answer to that, but I do know that a lot of my clients that are in deep trouble will become collateral damage and will need Chapter 12 in order to start over, even if that means a liquidation. Because Chapter 12 now provides the strongest chapter bankruptcy and allows them to start over without a huge tax bill that they would have otherwise. DC: Joe, you mentioned collateral damage that farmers could be caught in, what are you hearing from farmers, their concerns, their stress level right now? JP: What I’m hearing is this, we’re still trying to get people financing to get in the field yet this year. That’s normally something we’ve got lined up by the first of March or the 15th of March, at the latest. Not this year. This year we’re still getting calls from people that do not have financing to go to the filed. This is the latest I’ve had in 37 years of practice, of people having trouble getting financing. DC: Joe, if you haven’t secured financing at this point, isn’t it too late? JP: The likelihood of getting financing now is very low. We have a couple of companies that I would call second tier lenders that are out there that are making some loans, but they’re very proud of their money, it’s very expensive to get it and the question is are you better off letting somebody else rent the land and letting it go than you are trying to farm it? Which way will you lose less, becomes an operative question for a lot of my clients right now. DC: Joe, there are reports that the stress level of farmers has increased for a number of reasons. What’s your best advice? What should they do at this point? JP: Farmers that are under the stress, they’ve planted, they’re wondering what’s going to happen. First off, take care of your mental health. Get the exercise you need, that helps with mental health. Get counseling if you need it. Be big enough to admit you need help. You can’t do it alone. In addition, keep those pencils and computers working, look at your cash flow at all times, especially when you get back in around the first of July or so, you’ve got the final spraying done, look at everything again. See where you are compared to the budget you set forth, move forward and see what changes you need to given the new reality of what you expect your yields to be and what you expect your marketing to be. Be very proactive. You need to be proactive, not reactive. Hopefully, if you need to make adjustments you can go into your bank and say, “Hey, I need to make some adjustments. Here are the adjustments I plan to make. Are you with me?” And work with your banker on this, so that you can move forward and keep an operation together. These are very stressful times and those who do nothing will be in much worse shape than those who are proactive and looking for alternatives. DC: Joe Peiffer, a bankruptcy lawyer with Ag & Business Legal Strategies in Cedar Rapids. I’m Doug Cooper on the Big Show.
Crisis Resources
Farming is good honest work, but it can be stressful and bad situations can feel overwhelming. Crisis may be as close as next harvest, or a bank not renewing the crop note. If you’re feeling like you don’t have what it takes to keep going, ask for help; there are resources available to people just like you. You don’t have to deal with the crisis on your own. Here are some resources that may be helpful: Iowa Concern Hotline: 1-800-447-1985 Iowa Concern started in 1985 as a toll-free number serving the agricultural community. Today, Iowa Concern serves urban and rural Iowa. https://www.extension.iastate.edu/iowaconcern/ Availability: 24 hours a day, 7 days a week. Mobile Crisis Outreach: Call, or text, 1-855-800-1239. Availability to call, or text: 24 hours a day, 7 days a week Mobile Crisis Outreach serves East Central Iowa and it is offered free of charge. You can also talk with Mobile Crisis Outreach online, https://foundation2.org/mobile-crisis-outreach/. National Suicide Prevention Lifeline: 988 or 1-800-273-8255. The National Suicide Prevention Lifeline provides free, confidential emotional support for people in suicidal, or emotional distress. https://suicidepreventionlifeline.org/. Availability: 24 hours a day, 7 days a week. If you know of other resources that we should list here, please drop us a line using the contact form here: https://www.ablsonline.com/contact/
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.