Contract analysis

1. Greenfield Agricultural Partners LLC brings this action against Prairie Basin Grain Co. and Darren K. Musgrave for breach of contract, breach of personal guaranty, account stated, and unjust enrichment arising from PBGC's failure to pay $4,870,050.00 in principal, plus accrued interest, for grain delivered to and accepted by PBGC under a Master Grain Purchase and Off-Take Agreement dated March 15, 2019 (the "Off-T

2. Plaintiff Greenfield Agricultural Partners LLC is a limited liability company duly organized and existing under the laws of the State of Delaware, with its principal headquarters located at 1400 Grand Prairie Boulevard, Suite 800, Des Moines, Iowa 50309. GAP maintains a registered agent for service of process in the State of Illinois, Capitol Registered Agents Inc., located at 200 South Wacker Drive, Suite 3100, C

3. Defendant Prairie Basin Grain Co. is a corporation organized and existing under the laws of the State of Illinois, with its principal office located at 4520 Harvest Road, Champaign, Illinois 61820. PBGC maintains a registered agent for service of process in the State of Illinois, Ridgeline Corporate Services LLC, located at 77 West Washington Street, Suite 1420, Chicago, Illinois 60602. PBGC is a regional grain el

4. Defendant Darren K. Musgrave is an individual residing at 1188 Windermere Lane, Champaign, Illinois 61822. Musgrave serves as the president and sole director of PBGC and owns approximately 72% of the outstanding shares of PBGC. Contemporaneously with the execution of the Off-Take Agreement, Musgrave executed a limited personal guaranty (the "Musgrave Guaranty") of PBGC's payment obligations under the Off-Take Agre

5. This Court has subject matter jurisdiction over this action pursuant to the Illinois Code of Civil Procedure, 735 ILCS 5/1-101 et seq. The amount in controversy exceeds $50,000, exclusive of interest and costs.

6. This Court has personal jurisdiction over Defendant PBGC. PBGC is an Illinois corporation with its principal office located in Champaign, Illinois. PBGC maintains a registered agent in Cook County, Illinois, specifically Ridgeline Corporate Services LLC, at 77 West Washington Street, Suite 1420, Chicago, Illinois 60602. PBGC regularly transacts business in the State of Illinois. PBGC is therefore subject to the ge

7. This Court has personal jurisdiction over Defendant Musgrave. Musgrave is a resident of the State of Illinois, residing in Champaign, Illinois. Musgrave executed the Musgrave Guaranty, which is governed by Illinois law. Additionally, Musgrave expressly consented to jurisdiction in the courts of Cook County, Illinois, pursuant to Section 14.1 of the Off-Take Agreement, which dispute resolution and jurisdiction prov

8. Venue is proper in Cook County, Illinois. Section 14.1 of the Off-Take Agreement provides for the exclusive jurisdiction of the courts of Cook County, Illinois, or the United States District Court for the Northern District of Illinois, for the resolution of any disputes arising under or in connection with the Off-Take Agreement. Musgrave consented to such venue through the Musgrave Guaranty's incorporation of the

9. On or about March 15, 2019, GAP, as Seller, and PBGC, as Buyer, entered into that certain Master Grain Purchase and Off-Take Agreement (the "Off-Take Agreement"). A true and correct copy of the Off-Take Agreement, including all exhibits thereto, is attached hereto as Exhibit A and incorporated herein by reference.

10. The Off-Take Agreement has a five-year term commencing on March 15, 2019, and expiring on March 14, 2024, unless earlier terminated in accordance with its terms.

11. Under the Off-Take Agreement, PBGC agreed to purchase specified quantities of #2 Yellow Corn and #1 Yellow Soybeans from GAP on a forward-contract basis. Deliveries were to be made to PBGC's elevator facilities located in Champaign, Macon, and Piatt Counties, Illinois. The Off-Take Agreement established minimum annual volume commitments for each contract year, including: (a) for #2 Yellow Corn, a minimum of 1,200

12. The pricing mechanism under the Off-Take Agreement is set forth in the Agreement and its exhibits. Specifically, the purchase price for each delivery of grain is calculated based on the Chicago Board of Trade ("CBOT") nearby futures price at the time of delivery, adjusted by a negotiated basis differential. The basis differential is established on a quarterly basis pursuant to the terms set forth in Exhibit B to

13. Section 7.1 of the Off-Take Agreement provides that payment for grain delivered and accepted by PBGC is due net thirty (30) days from the date of delivery and acceptance at the applicable elevator facility.

14. Section 7.3 of the Off-Take Agreement provides that any amounts not paid when due shall bear interest at the rate of one and one-half percent (1.5%) per month, which is equivalent to eighteen percent (18%) per annum, calculated from the date such payment was due until the date such payment is received in full.

15. Section 12.4 of the Off-Take Agreement provides that in any action or proceeding to enforce the terms of the Off-Take Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing party.

16. Section 14.1 of the Off-Take Agreement provides that the Off-Take Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to principles of conflicts of law. Section 14.1 further provides that each party irrevocably submits to the exclusive jurisdiction of the courts of Cook County, Illinois, or the United States District Court for the Northern District of

17. Contemporaneously with the execution of the Off-Take Agreement, and as an inducement to GAP to enter into the Off-Take Agreement, Defendant Darren K. Musgrave executed a limited personal guaranty of PBGC's payment obligations under the Off-Take Agreement (the "Musgrave Guaranty"). The Musgrave Guaranty is denominated as Exhibit D to the Off-Take Agreement. A true and correct copy of the Musgrave Guaranty is attac

18. Pursuant to the terms of the Musgrave Guaranty, Musgrave unconditionally and irrevocably guaranteed the timely payment of all sums owed by PBGC to GAP under the Off-Take Agreement, up to a maximum aggregate amount of $2,000,000 (the "Guaranty Cap"). The Musgrave Guaranty is governed by the laws of the State of Illinois and expressly incorporates the dispute resolution and jurisdiction provisions of Section 14.1 o

19. GAP has performed all of its obligations under the Off-Take Agreement at all times relevant to the claims asserted in this Complaint. Specifically, from the third quarter of 2021 through the first quarter of 2022, GAP delivered grain to PBGC at PBGC's designated elevator facilities located in Champaign, Macon, and Piatt Counties, Illinois, in full compliance with the terms and conditions of the Off-Take Agreement

20. GAP issued the following five invoices for grain delivered to and accepted by PBGC during the relevant period: True and correct copies of each of these invoices are attached hereto as Composite Exhibit C and incorporated herein by reference. The total principal amount outstanding under these five invoices is $4,870,050.00.

21. Each of the deliveries reflected in the invoices listed in Paragraph 20 above was made to PBGC's elevator facilities located in Champaign, Macon, or Piatt Counties, Illinois, in accordance with the delivery terms of the Off-Take Agreement. PBGC received, inspected, and accepted each delivery of grain without raising any objection as to the quality, quantity, grade, or conformity of the grain delivered. At no time

22. PBGC has failed to pay any of the five invoices described in Paragraph 20 above. Each invoice became past due on its respective due date as set forth in the table above. Specifically, Invoice GAP-2021-3187 became past due on October 28, 2021; Invoice GAP-2021-3244 became past due on November 14, 2021; Invoice GAP-2021-3301 became past due on December 12, 2021; Invoice GAP-2021-3358 became past due on January 7, 2

23. Upon information and belief, beginning in or around the fourth quarter of 2021, PBGC experienced severe cash-flow shortfalls that rendered it unable or unwilling to meet its payment obligations under the Off-Take Agreement. Upon information and belief, the contributing factors to PBGC's financial distress include, without limitation: (a) margin compression resulting from volatile corn and soybean basis levels in

24. On or about January 25, 2022, GAP's Director of Grain Operations, Caleb Jennings, sent a written demand to PBGC's president, Darren K. Musgrave, at PBGC's principal office, demanding payment of the three invoices that were then outstanding and past due — specifically, Invoice GAP-2021-3187, Invoice GAP-2021-3244, and Invoice GAP-2021-3301 — in an aggregate amount of $3,053,250.00. The demand letter advised PBGC t

25. On or about February 3, 2022, Musgrave, in his capacity as president of PBGC, responded to GAP's demand via email directed to Caleb Jennings. In this email, Musgrave expressly acknowledged the debt owed by PBGC to GAP and did not dispute the accuracy or amount of any of the outstanding invoices. Musgrave requested a ninety (90) day forbearance, representing that PBGC was actively negotiating additional financing

26. On or about February 14, 2022, GAP, through Caleb Jennings, agreed to a sixty (60) day forbearance from the exercise of its remedies under the Off-Take Agreement. This forbearance was expressly conditioned on PBGC making a good-faith partial payment of Invoice GAP-2021-3187, in the full amount of $892,500.00, on or before March 1, 2022. GAP's agreement to the conditional forbearance was communicated to Musgrave i

27. PBGC failed to make the required payment of $892,500.00 by March 1, 2022. PBGC did not make any payment whatsoever by that date, nor did PBGC communicate any reason for its failure to comply with the condition of the forbearance. Because the express condition precedent to the forbearance was not satisfied, the forbearance did not take effect, and GAP's rights and remedies remained fully intact and unimpaired.

28. On or about March 8, 2022, GAP formally suspended further deliveries of grain under the Off-Take Agreement pursuant to Section 8.2 of the Off-Take Agreement, which grants GAP the right to demand adequate assurance of performance and to suspend its own performance when reasonable grounds for insecurity arise with respect to PBGC's ability to perform its payment obligations. GAP notified PBGC and Musgrave in writin

29. On or about April 11, 2022, GAP, through its counsel Calderwood & Harkness LLP, sent a formal pre-suit demand letter to PBGC, to the attention of Darren K. Musgrave, President, at PBGC's principal office at 4520 Harvest Road, Champaign, Illinois 61820, and separately to Darren K. Musgrave, individually, at his residential address at 1188 Windermere Lane, Champaign, Illinois 61822. The demand letter demanded full

30. The fifteen (15) business-day demand period specified in the April 11, 2022 demand letter expired on or about May 2, 2022. No payment, whether full or partial, was received from PBGC or from Musgrave in response to the demand letter. No substantive response of any kind was received from either Defendant. F. Accrued Interest

31. Pursuant to Section 7.3 of the Off-Take Agreement, interest accrues at the rate of one and one-half percent (1.5%) per month, equivalent to eighteen percent (18%) per annum, on all amounts that are not paid when due. As of the date of this filing, May 9, 2022, accrued interest on each unpaid invoice, calculated from its respective due date, is approximately as follows: (a) Invoice GAP-2021-3187 (due 10/28/2021):

32. GAP incorporates by reference the allegations set forth in Paragraphs 1 through 31 above as though fully stated herein.

33. The Off-Take Agreement, attached hereto as Exhibit A, constitutes a valid, binding, and enforceable contract between GAP, as Seller, and PBGC, as Buyer. The Off-Take Agreement was duly executed by authorized representatives of both parties on March 15, 2019, and is supported by adequate consideration.

34. GAP has fully performed all of its obligations under the Off-Take Agreement at all relevant times. Specifically, GAP delivered conforming grain to PBGC's elevator facilities in the quantities, at the prices, and in compliance with the quality specifications set forth in the Off-Take Agreement, as described in Paragraphs 19 through 21 above.

35. PBGC has materially breached the Off-Take Agreement by failing to pay the five invoices described in Paragraph 20 above, totaling $4,870,050.00 in principal, within the net thirty (30) day payment terms required by Section 7.1 of the Off-Take Agreement. Each of the five invoices has been past due since its respective due date, and no payment, whether full or partial, has been made by PBGC.

36. All conditions precedent to PBGC's payment obligations under the Off-Take Agreement have been performed, satisfied, or have otherwise occurred. GAP delivered conforming grain to PBGC's designated elevator facilities, and PBGC accepted each delivery without objection. There are no outstanding conditions, contingencies, or defenses that would excuse PBGC's obligation to pay.

37. As a direct and proximate result of PBGC's material breach of the Off-Take Agreement, GAP has been damaged in the amount of $4,870,050.00 in unpaid principal, plus accrued interest at the contractual rate of one and one-half percent (1.5%) per month (eighteen percent (18%) per annum) from each invoice's respective due date, plus continuing interest until the date of judgment.

38. Pursuant to Section 12.4 of the Off-Take Agreement, GAP, as the prevailing party in this action, is entitled to recover its reasonable attorneys' fees and costs incurred in prosecuting this action against PBGC. WHEREFORE, Plaintiff Greenfield Agricultural Partners LLC respectfully requests that this Court enter judgment in its favor and against Defendant Prairie Basin Grain Co. on Count I as follows: (a) Judgment

39. GAP incorporates by reference the allegations set forth in Paragraphs 1 through 38 above as though fully stated herein.

40. The Musgrave Guaranty, attached hereto as Exhibit B, constitutes a valid, binding, and enforceable agreement by Defendant Darren K. Musgrave to guarantee the payment obligations of PBGC under the Off-Take Agreement. The Musgrave Guaranty was duly executed by Musgrave contemporaneously with the Off-Take Agreement and is supported by adequate consideration, including, without limitation, the consideration flowing t

41. As set forth in Count I above, PBGC has materially breached the Off-Take Agreement by failing to pay $4,870,050.00 in principal for grain delivered and accepted. The amount of PBGC's unpaid obligations substantially exceeds the $2,000,000 Guaranty Cap.

42. GAP has demanded payment from Musgrave under the Musgrave Guaranty on multiple occasions, including through the formal pre-suit demand letter dated April 11, 2022, sent to Musgrave at his residential address, which demanded full payment of all outstanding sums, including amounts owed under the Musgrave Guaranty. GAP has thereby satisfied any demand or notice requirements that may be applicable under the terms of

43. Musgrave has failed and refused to make any payment whatsoever under the Musgrave Guaranty. Despite GAP's demands, Musgrave has not remitted any sums to GAP in satisfaction of his guaranty obligations and has not responded to the formal pre-suit demand letter.

44. As a direct and proximate result of Musgrave's breach of the Musgrave Guaranty, GAP has been damaged in the amount of $2,000,000 (the Guaranty Cap), plus any accrued interest and attorneys' fees recoverable under the terms of the Musgrave Guaranty and the Off-Take Agreement. WHEREFORE, Plaintiff Greenfield Agricultural Partners LLC respectfully requests that this Court enter judgment in its favor and against Defe

45. GAP incorporates by reference the allegations set forth in Paragraphs 1 through 31 above as though fully stated herein.

46. GAP and PBGC had a course of prior transactions under the Off-Take Agreement giving rise to a debtor-creditor relationship between PBGC, as debtor, and GAP, as creditor. Over the course of their multi-year commercial relationship, GAP regularly delivered grain to PBGC and issued invoices for such deliveries, and PBGC paid such invoices, thereby establishing a pattern and practice of commercial dealing between the

47. GAP rendered and delivered to PBGC the five invoices described in Paragraph 20 above. Each invoice specifically identified the commodity delivered, the quantity of bushels, the per-bushel price, and the total amount owed by PBGC to GAP. Each invoice was delivered to PBGC at its principal office and was directed to the attention of PBGC's accounts payable department.

48. PBGC received each of the five invoices and did not object to the accuracy, the amount, or the validity of any invoice within a reasonable time after receipt, or at all. At no point did PBGC communicate any dispute regarding the terms, amounts, or calculations reflected in any of the invoices.

49. On or about February 3, 2022, PBGC's president, Darren K. Musgrave, acting in his capacity as an authorized representative of PBGC, expressly acknowledged the indebtedness reflected in the then-outstanding invoices in an email to GAP's Director of Grain Operations, Caleb Jennings. Musgrave's acknowledgment further evidences that an account stated has arisen between the parties.

50. By retaining the invoices without objection, by accepting the grain deliveries reflected therein, and by Musgrave's express written acknowledgment of the indebtedness, an account stated arose between GAP and PBGC in the aggregate amount of $4,870,050.00.

51. PBGC has failed and refused to pay the account stated. Despite GAP's repeated demands for payment, PBGC has not remitted any payment on the account. WHEREFORE, Plaintiff Greenfield Agricultural Partners LLC respectfully requests that this Court enter judgment in its favor and against Defendant Prairie Basin Grain Co. on Count III as follows: (a) Judgment in the amount of $4,870,050.00; (b) Accrued interest on the

52. GAP incorporates by reference the allegations set forth in Paragraphs 1 through 31 above as though fully stated herein.

53. In the alternative to Counts I and III, and only in the event that the Off-Take Agreement is found to be unenforceable for any reason, GAP states this Count IV for unjust enrichment against PBGC.

54. GAP delivered grain of substantial value to PBGC, as described in Paragraphs 19 through 21 above. The grain delivered consisted of 470,000 bushels of #2 Yellow Corn and 155,000 bushels of #1 Yellow Soybeans, having an aggregate value of $4,870,050.00.

55. PBGC accepted and retained the full benefit of the grain delivered by GAP. Upon information and belief, PBGC received, stored, merchandised, and/or sold the delivered grain for its own commercial benefit and profit. PBGC has derived the full commercial value of the grain delivered by GAP.

56. Despite accepting and retaining the full benefit of the grain, PBGC has not paid GAP for the value of the grain delivered. PBGC has retained the entire economic benefit of the grain without providing any consideration or compensation to GAP.

57. Under the circumstances, it would be unjust and inequitable for PBGC to retain the benefit of the grain delivered by GAP without paying GAP for the reasonable value thereof. PBGC's retention of the benefit conferred by GAP without payment constitutes unjust enrichment.

58. The reasonable value of the grain delivered to and accepted by PBGC is $4,870,050.00, as reflected in the invoices described in Paragraph 20 above, which represent fair market value pricing consistent with the CBOT nearby futures prices prevailing at the time of each delivery. WHEREFORE, Plaintiff Greenfield Agricultural Partners LLC respectfully requests that this Court enter judgment in its favor and against De

1. Judgment in favor of Plaintiff Greenfield Agricultural Partners LLC and against Defendant Prairie Basin Grain Co. on Counts I, III, and/or IV in the amount of $4,870,050.00 in principal;

2. Judgment in favor of Plaintiff Greenfield Agricultural Partners LLC and against Defendant Darren K. Musgrave on Count II in the amount of $2,000,000;