LINCOLN, Neb. (DTN) -- The IRS executed a federal search warrant at Zeeland, Michigan-based Boersen Farms on June 9 in connection with an investigation of the troubled farm, Detroit-based IRS Special Agent Henry Pletscher confirmed to DTN on Monday.
Charges have not been filed against Boersen Farms as of Monday morning. The IRS typically executes search warrants in connection to alleged financial crimes that can include tax evasion. Pletscher did not disclose the reason for the raid.
Boersen attorney Ronald J. VanderVeen told DTN, "Nicholas Boersen and Stacy Boersen believe that they have complied with all legal requirements and have committed no financial fraud on anyone."
Stacy Boersen is the wife of Boersen Farms' owner Dennis Boersen. Nicholas Boersen is the couple's son who is listed as the agent for one of two other limited liability corporation farms owned by the Boersen family, New Heights Farm one and two. Stacy Boersen is listed as the agent for one of those farms.
Boersen Farms has for years faced a number of lawsuits from companies that provided products and services to the farm that once operated about 83,000 acres. Those lawsuits were filed in an attempt to force Boersen Farms to pay money owed to the companies.
One creditor of Boersen Farms, Helena Agri-Enterprises, obtained a nearly $15 million judgment against the Boersen's New Heights Farm entities and Nicholas and Stacy Boersen.
The U.S. Court of Appeals for the Sixth Circuit in Cincinnati, Ohio, ruled in February 2021 that Helena Agri-Enterprises could not pursue other family business entities to collect the judgement, https://www.opn.ca6.uscourts.gov/….
"When they could not pay that debt, Helena sued other Boersen family members and their newly formed companies, claiming that these new corporate forms should not be respected and were fraudulently designed to sidestep the debt," the Sixth Circuit said in its opinion.
"Because Helena has failed to offer a legitimate explanation for slighting the corporate form, we affirm the district court's grant of summary judgment to the defendants."
In March 2021, the U.S. District Court for the Michigan Western District, temporarily lifted a restraining order against Boersen Farms that forbids the sale of farm assets. Boersen Farms recently was forced to sell three tracts of land in an attempt to pay off creditors.
Boersen Farms was sued in 2017 by CHS Capital Inc. for defaulting on a $145.3 million loan.
Boersen Farms bought the bulk of assets from now-defunct Stamp Farms LLC. Stamp Farms' owner Michael Stamp has been sentenced to time in prison in connection with charges related to his farm's bankruptcy. Stamp Farms, based in Decatur, Michigan, filed for Chapter 11 bankruptcy protection in November 2012.
Boersen Farms ran into financial difficulty when the price of corn dropped from $6 and $7 when it purchased the Stamp assets to less than $4 per bushel.
According to the CHS lawsuit, Boersen Farms received a notice of default and termination of the $145.3 million loan on Aug. 14, 2017.
The CHS lawsuit leveled a number of allegations against Boersen Farms, including that it "fraudulently and intentionally misrepresented to CHS Capital the quantity of harvested 20l6 grain available for sale, which quantity and resulting expected sale proceeds were included in the budget."
In October 2017, LT Capital LLC agreed to take on the CHS debt and asked for a dismissal of the CHS court action against the farm.
The farm also was sued by equipment companies and others.
In November 2017, the U.S. District Court for the District of Utah issued a $16.2 million judgment in favor of equipment company TFG-Michigan. TFG filed a lawsuit claiming it has not been paid for more than 120 center pivots leased by Boersen Farms.
In U.S. District Court for the District of Kansas, Boersen Farms was sued for breach of contract related to its pursuit of finding someone to acquire the CHS debt.
Read more DTN coverage here:
"Michigan Farm to Get New Lease on Life," https://www.dtnpf.com/…
"Corn Slump Hurts Farm Giant," https://www.dtnpf.com/…
"Michigan Farm Considers Options," https://www.dtnpf.com/…
"MI Farm Defaults on Seed Contract," https://www.dtnpf.com/…
Todd Neeley can be reached at firstname.lastname@example.org
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