1020-00005 · Greenfield Agricultural Partners · Closing

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CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law

225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606

Telephone: (312) 555-7200 Facsimile: (312) 555-7201 www.calderwoodharkness.com

Francesca Morano Partner Direct: (312) 555-7244

Email: fmorano@calderwoodharkness.com

February 17, 2023

Mr. Thomas R. Greenfield Chairman and Chief Executive Officer Greenfield Agricultural Partners LLC 1400 Grand Prairie Boulevard, Suite 800 Des Moines, Iowa 50309

Re: Greenfield Agricultural Partners LLC v. Prairie Basin Grain Co. et al. Circuit Court of Cook County, Illinois, Case No. 2022-L-004831 Calderwood & Harkness LLP Matter No. 1020-00005 Matter Closing Notification

Dear Mr. Greenfield:

1. Purpose and Confirmation of Dismissal

The purpose of this letter is to confirm the formal closure of the above-referenced matter on the records of Calderwood & Harkness LLP and to provide you with a comprehensive summary of the proceedings, the current status of all related claims, and our recommendations for ongoing monitoring and future action.

On February 17, 2023, the Circuit Court of Cook County, Illinois, County Department, Law Division (the Honorable Patricia Delacroix, Judge Presiding), entered the Order of Voluntary Dismissal Without Prejudice, dismissing Case No. 2022-L-004831 in its entirety as to all counts—Counts I through IV—and as to all defendants, namely Prairie Basin Grain Co. ("PBGC") and Darren K. Musgrave, without prejudice. A copy of the entered order is enclosed with this letter for your records.

The Voluntary Motion to Dismiss was filed by Calderwood & Harkness on behalf of Greenfield Agricultural Partners LLC ("GAP") on February 10, 2023, pursuant to Section 2-1009 of the Illinois Code of Civil Procedure, 735 ILCS 5/2-1009. As set forth in greater detail below, this course of action was pursued in light of the intervening receivership proceedings involving PBGC, which rendered continued prosecution of the Cook County action impracticable and strategically inadvisable at this time. No counterclaims were pending at the time of dismissal, and no conditions or terms were imposed by the Court on the dismissal.

With the entry of this order, the Cook County litigation is concluded, and Calderwood & Harkness is formally closing Matter No. 1020-00005 on the firm's records. It is important to emphasize, however, that as discussed in detail in Sections 3 and 6 below, GAP retains significant preserved claims and rights that warrant continued attention.

2. Summary of the Matter

We provide the following comprehensive summary of the matter for your records and for the benefit of GAP's internal files.

2(a). Engagement and Pre-Suit Phase

Calderwood & Harkness was retained by Greenfield Agricultural Partners LLC on March 22, 2022, pursuant to the terms of an executed Engagement Letter of that same date, to pursue a breach-of-contract collection action against Prairie Basin Grain Co. ("PBGC"), an Illinois corporation with its principal place of business in Decatur, Illinois, and its president and personal guarantor, Darren K. Musgrave, individually.

The claims arose from PBGC's failure to remit payment on five invoices totaling $4,870,050.00 in outstanding principal under the Master Grain Purchase and Off-Take Agreement dated March 15, 2019 (the "Off-Take Agreement"), which governed the purchase, delivery, and payment terms for bulk grain commodities between GAP and PBGC. The Off-Take Agreement was a multi-year supply arrangement under which GAP agreed to deliver specified quantities of commodity grain to PBGC at designated delivery points, and PBGC agreed to accept delivery and remit payment within the contractually stipulated periods.

The five unpaid invoices at issue, representing deliveries of #2 Yellow Corn and #1 Yellow Soybeans from September 2021 through January 2022, are as follows:

Each invoice carried payment terms of Net 30 as specified in Section 5.3 of the Off-Take Agreement, and each was unpaid and past due at the time of engagement.

Prior to the commencement of litigation, on April 11, 2022, Calderwood & Harkness transmitted a formal pre-suit demand letter via certified mail to PBGC at its principal office in Decatur, Illinois, and to Mr. Musgrave at his residence address, demanding payment in full of all outstanding principal, together with accrued interest at the contractual rate of 1.5% per month, within fifteen (15) business days. The demand letter was sent in compliance with the notice provisions of Section 11.2 of the Off-Take Agreement. No response of any kind was received from either PBGC or Mr. Musgrave by the expiration of the demand period on May 2, 2022, nor at any time thereafter prior to the filing of the Complaint.

2(b). Filing and Pleading Phase

Following the expiration of the pre-suit demand period without response, the firm filed a Verified Complaint on May 9, 2022, in the Circuit Court of Cook County, Illinois, County Department, Law Division. The case was assigned Case No. 2022-L-004831 and was assigned to the calendar of the Honorable Patricia Delacroix.

The Complaint asserted the following four counts:

Count I — Breach of Contract (against PBGC). This count alleged PBGC's breach of its payment obligations under the Off-Take Agreement by failing to remit payment on the five invoices totaling $4,870,050.00 in principal, and sought recovery of the full principal amount plus contractual interest at the rate of 1.5% per month from each respective invoice due date, together with attorneys' fees and costs pursuant to the prevailing-party fee provision set forth in Section 12.4 of the Off-Take Agreement.

Count II — Breach of Personal Guaranty (against Darren K. Musgrave, individually). This count alleged Mr. Musgrave's breach of his personal guaranty of PBGC's obligations, which was executed as Exhibit D to the Off-Take Agreement. The guaranty was a continuing guaranty of all payment obligations of PBGC under the Off-Take Agreement, subject to a cap of $2,000,000.00 in aggregate liability.

Count III — Account Stated (against PBGC). This count alleged that the five invoices constituted accounts stated, having been rendered to PBGC in the ordinary course of business, retained by PBGC without objection, and implicitly accepted by PBGC's course of dealing, including partial performance and acceptance of goods.

Count IV — Unjust Enrichment (alternative count, against PBGC). This count was pled in the alternative and alleged that PBGC was unjustly enriched by receiving and retaining the benefit of grain deliveries valued at $4,870,050.00 without remitting payment therefor, and that equity and good conscience required restitution.

Service of process was completed on May 24, 2022, on both defendants. PBGC was served through its registered agent, Ridgeline Corporate Services LLC, at its designated address in Springfield, Illinois, in accordance with 735 ILCS 5/2-204. Mr. Musgrave was personally served at his residence at 1188 Windermere Lane, Champaign, Illinois 61822, in accordance with 735 ILCS 5/2-203. Proof of service was filed with the Clerk of the Circuit Court on May 31, 2022.

On June 27, 2022, PBGC and Mr. Musgrave, through their then-counsel, Douglas M. Harkin of Bartlett, Reyes Linley CPAs LLP & Harkin LLP, filed an Answer and Affirmative Defenses to the Complaint. The defendants generally denied liability and asserted three affirmative defenses: (1) force majeure, citing a fire at PBGC's grain elevator facility in Macon County, Illinois, in September 2021, which allegedly disrupted operations and rendered performance commercially impracticable; (2) commercial impracticability under Section 2-615 of the Uniform Commercial Code, as adopted in Illinois; and (3) failure to mitigate damages, alleging that GAP failed to take reasonable steps to resell the grain delivered to PBGC or otherwise minimize its losses.

2(c). Motion Practice

On July 15, 2022, Calderwood & Harkness filed a Motion to Strike Affirmative Defenses on behalf of GAP, challenging the legal sufficiency of each of the three asserted affirmative defenses. The motion argued, among other things, that the force majeure clause contained in Section 9.1 of the Off-Take Agreement, by its express terms, excused only delivery and performance obligations—not payment obligations—and that the clause's enumerated triggering events did not encompass a fire at a buyer's own facility. The motion further argued that commercial impracticability under UCC Section 2-615 was inapplicable because PBGC was the buyer, not the seller, and because the Macon County elevator fire affected only one of PBGC's six operational grain storage and handling facilities, leaving the remaining five facilities fully operational and capable of receiving and processing grain.

The motion was fully briefed following the filing of the defendants' response on August 5, 2022, and GAP's reply brief on August 15, 2022. On August 22, 2022, Judge Delacroix heard oral argument and entered an order granting the Motion to Strike as to the first affirmative defense (force majeure) and the second affirmative defense (commercial impracticability), finding that neither defense was legally sufficient as pled. The Court denied the Motion to Strike as to the third affirmative defense (failure to mitigate), holding that the defense was legally cognizable and sufficiently pled to survive a motion to strike, although the Court noted that the burden of proving failure to mitigate would rest with the defendants at trial.

This ruling was a significant favorable development in the case, as it eliminated PBGC's primary substantive defenses and narrowed the remaining contested issues to the question of mitigation.

2(d). Discovery Phase

A Case Management Conference was held before Judge Delacroix on September 12, 2022, at which the Court set a discovery schedule and established deadlines for the completion of written discovery, depositions, and dispositive motions. The discovery period was set to close on March 15, 2023.

On September 30, 2022, Calderwood & Harkness served GAP's First Set of Interrogatories (consisting of twenty-four interrogatories) and GAP's First Request for Production of Documents (consisting of thirty-seven document requests) on defendants' counsel. The interrogatories sought detailed information regarding PBGC's financial condition, the Macon County fire, PBGC's insurance claims, and the basis for each affirmative defense. The document requests sought, among other things, PBGC's financial statements, bank records, insurance policies and claims correspondence, the Macon County fire report, and all communications between PBGC and its creditors.

On October 14, 2022, Calderwood & Harkness served GAP's Requests for Admission on the defendants, consisting of twenty-one requests. These requests sought admissions regarding the authenticity and execution of the Off-Take Agreement, the authenticity of each of the five unpaid invoices, the delivery and acceptance of the grain shipments underlying each invoice, and the amounts owed by PBGC to GAP. As discussed below, the defendants' counsel withdrew before responses to these discovery requests were served.

2(e). Defense Counsel Withdrawal

On November 4, 2022, Bartlett, Reyes Linley CPAs LLP & Harkin LLP filed a Motion to Withdraw as counsel for PBGC and Darren K. Musgrave, citing the defendants' non-payment of legal fees and the breakdown of the attorney-client relationship. The motion was noticed for hearing on November 18, 2022.

On November 18, 2022, Judge Delacroix granted the Motion to Withdraw, effective immediately. Neither PBGC nor Mr. Musgrave appeared at the hearing, nor did they file any opposition to the withdrawal motion. The Court's order granting withdrawal noted that PBGC, as a corporate entity, could not appear pro se under Illinois law and directed PBGC to retain substitute counsel within thirty (30) days or face potential entry of default. No substitute counsel was ever retained by PBGC.

As a consequence of counsel's withdrawal, no responses were ever served to GAP's First Set of Interrogatories, First Request for Production of Documents, or Requests for Admission. Under Illinois Supreme Court Rule 216(c), the Requests for Admission were deemed admitted by operation of law upon the expiration of the twenty-eight-day response period without response.

2(f). Receivership and Automatic Stay

On November 28, 2022, before the expiration of the thirty-day period for PBGC to retain substitute counsel, Heartland Prairie Bank, N.A.—PBGC's senior secured lender—filed a Verified Petition for Appointment of Receiver over PBGC in the Circuit Court of Sangamon County, Illinois, Chancery Division, Case No. 2022-CH-001247. The petition alleged that PBGC was in default under its credit facility with Heartland Prairie Bank, that PBGC was insolvent and operating at a loss, and that the appointment of a receiver was necessary to preserve and protect the assets of PBGC for the benefit of all creditors.

On December 12, 2022, following an evidentiary hearing, the Sangamon County Court (the Honorable Michael P. Brennan, Judge Presiding) entered an Order Appointing Receiver, designating Gareth J. Whitmore of Whitmore Strauss Advisory LLC as receiver for all assets and operations of PBGC. The receivership order granted broad authority to Mr. Whitmore to take possession and control of all assets of PBGC, operate the business, investigate claims against and by PBGC, and administer the orderly liquidation or disposition of PBGC's assets. Critically, the order included an automatic stay of all pending litigation against PBGC, prohibiting the commencement or continuation of any judicial, administrative, or other action or proceeding against PBGC or its assets without prior leave of the Sangamon County Court.

Calderwood & Harkness received formal notice of the receivership order and automatic stay on December 19, 2022, through service of the order by receiver's counsel, Joanna M. Lockridge of Lockridge Payne LLP. Upon receipt of this notice, Calderwood & Harkness immediately advised GAP of the receivership and its implications for the Cook County litigation.

The automatic stay rendered further prosecution of the Cook County action against PBGC impracticable and legally impermissible absent leave of the Sangamon County Court. Given the circumstances, and in consultation with GAP, Calderwood & Harkness determined that the appropriate course of action was to assert GAP's claims in the receivership proceeding and to voluntarily dismiss the Cook County action without prejudice, thereby preserving all of GAP's rights while avoiding unnecessary litigation costs.

2(g). Assertion of Claims in Receivership

On January 10, 2023, Calderwood & Harkness transmitted a formal letter to receiver's counsel, Joanna M. Lockridge at Lockridge Payne LLP, 120 South Sixth Street, Suite 1800, Springfield, Illinois 62701, formally notifying the receiver of GAP's pending claims against PBGC and requesting information regarding the claims submission process and the schedule for administration of the receivership estate.

On January 30, 2023, Calderwood & Harkness timely filed a Proof of Claim on behalf of GAP in the Sangamon County receivership proceeding, Case No. 2022-CH-001247, in accordance with the claims bar date and procedures established by the receiver. GAP's Proof of Claim asserts a total unsecured claim of approximately $5,664,428.85, calculated as follows:

The Proof of Claim was accompanied by the following supporting exhibits: (i) a certified copy of the Off-Take Agreement, including all exhibits and amendments; (ii) copies of the five unpaid invoices; (iii) a copy of the pre-suit demand letter dated April 11, 2022; (iv) copies of all forbearance correspondence between GAP and PBGC; and (v) a detailed interest calculation spreadsheet setting forth the accrual of contractual interest on each invoice from its respective due date through December 31, 2022, at the rate of 1.5% per month.

3. Current Status and Preserved Claims

3(a). Receivership Claim

GAP's Proof of Claim remains pending in the Sangamon County receivership proceeding, Case No. 2022-CH-001247. To date, no order has been entered allowing or disallowing the claim, and we understand that the receiver is still in the process of reviewing and reconciling claims submitted by creditors of PBGC.

GAP's claim is classified as unsecured. As you are aware, PBGC's assets are encumbered by Heartland Prairie Bank, N.A.'s prior perfected security interest under Article 9 of the Uniform Commercial Code, covering substantially all of PBGC's personal property, including inventory, accounts receivable, equipment, and general intangibles. We understand that Heartland Prairie Bank's outstanding balance under its credit facility with PBGC is approximately $31.4 million against a $45 million aggregate commitment. Heartland Prairie Bank's secured claim will be satisfied in full before any distributions are made to unsecured creditors.

Based on publicly available information and filings in the receivership proceeding, PBGC's total reported liabilities are estimated at approximately $58 million to $62 million against total assets with an estimated value of $35 million to $40 million. This presents a significant shortfall for unsecured creditors, and it is likely that any distribution to unsecured creditors will represent a fraction of the total amounts claimed. We will, of course, continue to monitor these developments and keep you informed should GAP elect to engage Calderwood & Harkness for representation in the receivership proceeding.

The receivership proceeding continues to be administered by Gareth J. Whitmore of Whitmore Strauss Advisory LLC, with counsel Lockridge Payne LLP.

3(b). Musgrave Guaranty Claim

It is important to note that the voluntary dismissal of the Cook County action was entered without prejudice as to all defendants, including Darren K. Musgrave individually. Accordingly, GAP's claim under Mr. Musgrave's personal guaranty of PBGC's payment obligations—executed as Exhibit D to the Off-Take Agreement—is fully preserved.

The Musgrave Guaranty is a continuing guaranty of all payment obligations of PBGC under the Off-Take Agreement, subject to a cap of $2,000,000.00 in aggregate liability. GAP retains the unqualified right to refile the guaranty claim against Mr. Musgrave in an appropriate court, subject to applicable statutes of limitations, should GAP elect to pursue the personal guaranty claim independently of the receivership proceeding.

We note that Mr. Musgrave's personal obligation under the Musgrave Guaranty may not be subject to the automatic stay entered in the Sangamon County receivership proceeding, as the stay by its terms applies to actions against PBGC and PBGC's assets, rather than to actions against individual guarantors in their personal capacity. However, further analysis of the scope of the receivership stay, the potential interplay between GAP's claim in the receivership and a separate guaranty action, and Mr. Musgrave's personal financial condition would be required before commencing a separate action against Mr. Musgrave. If GAP wishes to explore this avenue, we would be pleased to provide a detailed assessment upon the establishment of a new engagement.

3(c). Right to Refile the Cook County Action

The dismissal without prejudice under 735 ILCS 5/2-1009 preserves GAP's right to refile the Cook County action—or to file a new action—against PBGC and/or Mr. Musgrave in the event that the Sangamon County receivership stay is lifted, the receivership concludes without full satisfaction of GAP's claim, or circumstances otherwise warrant renewed litigation.

We respectfully remind you, however, that applicable statutes of limitations will continue to run during the period of dismissal. Under Illinois law, the statute of limitations for breach of a written contract is ten years (735 ILCS 5/13-206), calculated from the date of each breach (i.e., the date each invoice became past due). GAP should be mindful of these limitation periods in connection with any decision regarding the timing of future action. Should GAP desire a detailed analysis of the applicable limitation dates for each claim, we are available to provide that analysis upon request.

4. Summary of Fees and Costs

Set forth below is a summary of the total professional fees and costs billed to GAP for Calderwood & Harkness's representation in Matter No. 1020-00005 through the conclusion of the engagement:

Costs and disbursements include filing fees, service of process fees, court reporter fees for hearing transcripts, legal research charges (Westmark Data Systems), copying and production costs, and related out-of-pocket expenses. A detailed breakdown of all fees and costs is set forth in the Final Invoice Summary and Fee Statement, which has been separately transmitted to your attention and is enclosed with this letter.

As noted in Section 2(g) above, the total amount of attorneys' fees and costs ($302,037.85) has been included as a component of GAP's Proof of Claim in the Sangamon County receivership proceeding, pursuant to the prevailing-party attorneys' fees provision set forth in Section 12.4 of the Off-Take Agreement. To the extent any distribution is received from the receivership estate on account of the attorneys' fees component of the claim, such amounts would be payable to GAP.

5. Document Retention and File Disposition

Calderwood & Harkness will retain the complete matter file for Matter No. 1020-00005 in accordance with the firm's document retention policy, which provides for the retention of closed litigation files for a period of ten (10) years from the date of closure unless a shorter or longer retention period is required by applicable law, court order, or client instruction. Following the expiration of the retention period, the firm reserves the right to destroy the file in accordance with the firm's standard procedures, unless instructed otherwise by GAP.

Any original documents provided by GAP to Calderwood & Harkness during the course of the engagement—including, without limitation, original executed copies of the Off-Take Agreement and related exhibits, original invoices, and original correspondence—will be returned to GAP upon written request. Please direct any such request to my attention.

We strongly advise GAP to continue preserving all documents and records relating to the Off-Take Agreement, PBGC, and Darren K. Musgrave, including but not limited to financial records, correspondence, delivery records, internal memoranda, and electronic communications. The preservation obligation is particularly important given that the receivership proceeding remains pending in Sangamon County and GAP's claim under the Musgrave Guaranty is preserved. Premature destruction of relevant documents could prejudice GAP's ability to prosecute its claims in the receivership proceeding or in any future litigation.

6. Recommendation for Ongoing Monitoring

Although Matter No. 1020-00005 is being formally closed on Calderwood & Harkness's records, we recommend that GAP actively monitor the Sangamon County receivership proceeding, Case No. 2022-CH-001247, for significant developments. Key events to monitor include, but are not limited to:

• Any interim or final distributions to creditors of PBGC, including the schedule and percentage of distributions to the unsecured creditor class;

• Any motions or orders regarding the allowance or disallowance of claims filed in the receivership, including GAP's Proof of Claim;

• Any objections to GAP's claim by the receiver, Heartland Prairie Bank, or other parties in interest;

• The ultimate disposition of PBGC's assets, whether through liquidation, sale as a going concern, or other disposition;

• Any modification or lifting of the automatic stay, which could affect GAP's ability to resume the Cook County litigation or to pursue a separate action against Mr. Musgrave; and

• Any developments relating to Triton Mutual Insurance Co. coverage litigation proceeds, which, if resolved favorably, could augment the receivership estate and potentially improve recovery prospects for unsecured creditors.

If GAP wishes Calderwood & Harkness to continue representing GAP in the Sangamon County receivership proceeding—including monitoring the proceeding, responding to any objections to GAP's claim, and participating in distributions—or to pursue the Musgrave Guaranty claim against Darren K. Musgrave individually, a new engagement letter and matter number would need to be established. We would be pleased to discuss the scope, terms, and anticipated costs of any such engagement at your convenience.

7. Closing

On behalf of Calderwood & Harkness, I wish to express our sincere appreciation for the opportunity to represent Greenfield Agricultural Partners LLC in this matter. We understand the significance of the amounts at stake and the importance of GAP's commercial relationships in the grain trading industry, and we remain committed to assisting GAP in achieving the best possible outcome in the receivership proceeding and with respect to the preserved guaranty claim, should GAP elect to engage our firm for continued representation.

Please do not hesitate to contact me directly with any questions regarding this letter, the receivership claim, the preserved Musgrave Guaranty claim, or any other matter in which we may be of assistance.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Francesca Morano Partner Direct: (312) 555-7244

Email: fmorano@calderwoodharkness.com

cc:

Margaret A. Greenfield-Wu, President and Chief Operating Officer, Greenfield Agricultural Partners LLC Caleb Jennings, Director of Grain Operations, GAP Grain Trading Division Samuel Eklund, Partner, Calderwood & Harkness LLP Hannah Brinkley, Associate, Calderwood & Harkness LLP

Enclosures:

1. Copy of Order of Voluntary Dismissal Without Prejudice dated February 17, 2023 (Circuit Court of Cook County, Illinois, Case No. 2022-L-004831)

2. Final Invoice Summary and Fee Statement — Calderwood & Harkness LLP Matter No. 1020-00005

Invoice No.	Invoice Date	Commodity	Amount
GAP-2021-3187	September 22, 2021	#2 Yellow Corn	$892,500.00
GAP-2021-3244	October 18, 2021	#1 Yellow Soybeans	$936,750.00
GAP-2021-3301	November 15, 2021	#2 Yellow Corn	$1,224,000.00
GAP-2021-3358	December 10, 2021	#1 Yellow Soybeans	$741,600.00
GAP-2022-0042	January 14, 2022	#2 Yellow Corn	$1,075,200.00
Total Principal	$4,870,050.00
Component	Amount
Principal (five unpaid invoices)	$4,870,050.00
Accrued contractual interest through December 31, 2022 (calculated at 1.5% per month on each invoice from its respective due date)	$492,341.00 (approx.)
Attorneys' fees and costs (pursuant to Section 12.4 of the Off-Take Agreement, prevailing-party provision)	$302,037.85
Total Claim	$5,664,428.85 (approx.)
Category	Amount
Total professional fees billed through January 31, 2023	$287,415.50
Total costs and disbursements	$14,622.35
Total amount billed — Matter No. 1020-00005	$302,037.85

CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606
Telephone: (312) 555-7200 Facsimile: (312) 555-7201 www.calderwoodharkness.com
Francesca Morano Partner Direct: (312) 555-7244
Email: fmorano@calderwoodharkness.com
February 17, 2023
Mr. Thomas R. Greenfield Chairman and Chief Executive Officer Greenfield Agricultural Partners LLC 1400 Grand Prairie Boulevard, Suite 800 Des Moines, Iowa 50309
Re: Greenfield Agricultural Partners LLC v. Prairie Basin Grain Co. et al. Circuit Court of Cook County, Illinois, Case No. 2022-L-004831 Calderwood & Harkness LLP Matter No. 1020-00005 Matter Closing Notification
Dear Mr. Greenfield:
1. Purpose and Confirmation of Dismissal
The purpose of this letter is to confirm the formal closure of the above-referenced matter on the records of Calderwood & Harkness LLP and to provide you with a comprehensive summary of the proceedings, the current status of all related claims, and our recommendations for ongoing monitoring and future action.
On February 17, 2023, the Circuit Court of Cook County, Illinois, County Department, Law Division (the Honorable Patricia Delacroix, Judge Presiding), entered the Order of Voluntary Dismissal Without Prejudice, dismissing Case No. 2022-L-004831 in its entirety as to all counts—Counts I through IV—and as to all defendants, namely Prairie Basin Grain Co. ("PBGC") and Darren K. Musgrave, without prejudice. A copy of the entered order is enclosed with this letter for your records.
The Voluntary Motion to Dismiss was filed by Calderwood & Harkness on behalf of Greenfield Agricultural Partners LLC ("GAP") on February 10, 2023, pursuant to Section 2-1009 of the Illinois Code of Civil Procedure, 735 ILCS 5/2-1009. As set forth in greater detail below, this course of action was pursued in light of the intervening receivership proceedings involving PBGC, which rendered continued prosecution of the Cook County action impracticable and strategically inadvisable at this time. No counterclaims were pending at the time of dismissal, and no conditions or terms were imposed by the Court on the dismissal.
With the entry of this order, the Cook County litigation is concluded, and Calderwood & Harkness is formally closing Matter No. 1020-00005 on the firm's records. It is important to emphasize, however, that as discussed in detail in Sections 3 and 6 below, GAP retains significant preserved claims and rights that warrant continued attention.
2. Summary of the Matter
We provide the following comprehensive summary of the matter for your records and for the benefit of GAP's internal files.
2(a). Engagement and Pre-Suit Phase
Calderwood & Harkness was retained by Greenfield Agricultural Partners LLC on March 22, 2022, pursuant to the terms of an executed Engagement Letter of that same date, to pursue a breach-of-contract collection action against Prairie Basin Grain Co. ("PBGC"), an Illinois corporation with its principal place of business in Decatur, Illinois, and its president and personal guarantor, Darren K. Musgrave, individually.
The claims arose from PBGC's failure to remit payment on five invoices totaling $4,870,050.00 in outstanding principal under the Master Grain Purchase and Off-Take Agreement dated March 15, 2019 (the "Off-Take Agreement"), which governed the purchase, delivery, and payment terms for bulk grain commodities between GAP and PBGC. The Off-Take Agreement was a multi-year supply arrangement under which GAP agreed to deliver specified quantities of commodity grain to PBGC at designated delivery points, and PBGC agreed to accept delivery and remit payment within the contractually stipulated periods.
The five unpaid invoices at issue, representing deliveries of #2 Yellow Corn and #1 Yellow Soybeans from September 2021 through January 2022, are as follows:
Each invoice carried payment terms of Net 30 as specified in Section 5.3 of the Off-Take Agreement, and each was unpaid and past due at the time of engagement.
Prior to the commencement of litigation, on April 11, 2022, Calderwood & Harkness transmitted a formal pre-suit demand letter via certified mail to PBGC at its principal office in Decatur, Illinois, and to Mr. Musgrave at his residence address, demanding payment in full of all outstanding principal, together with accrued interest at the contractual rate of 1.5% per month, within fifteen (15) business days. The demand letter was sent in compliance with the notice provisions of Section 11.2 of the Off-Take Agreement. No response of any kind was received from either PBGC or Mr. Musgrave by the expiration of the demand period on May 2, 2022, nor at any time thereafter prior to the filing of the Complaint.
2(b). Filing and Pleading Phase
Following the expiration of the pre-suit demand period without response, the firm filed a Verified Complaint on May 9, 2022, in the Circuit Court of Cook County, Illinois, County Department, Law Division. The case was assigned Case No. 2022-L-004831 and was assigned to the calendar of the Honorable Patricia Delacroix.
The Complaint asserted the following four counts:
Count I — Breach of Contract (against PBGC). This count alleged PBGC's breach of its payment obligations under the Off-Take Agreement by failing to remit payment on the five invoices totaling $4,870,050.00 in principal, and sought recovery of the full principal amount plus contractual interest at the rate of 1.5% per month from each respective invoice due date, together with attorneys' fees and costs pursuant to the prevailing-party fee provision set forth in Section 12.4 of the Off-Take Agreement.
Count II — Breach of Personal Guaranty (against Darren K. Musgrave, individually). This count alleged Mr. Musgrave's breach of his personal guaranty of PBGC's obligations, which was executed as Exhibit D to the Off-Take Agreement. The guaranty was a continuing guaranty of all payment obligations of PBGC under the Off-Take Agreement, subject to a cap of $2,000,000.00 in aggregate liability.
Count III — Account Stated (against PBGC). This count alleged that the five invoices constituted accounts stated, having been rendered to PBGC in the ordinary course of business, retained by PBGC without objection, and implicitly accepted by PBGC's course of dealing, including partial performance and acceptance of goods.
Count IV — Unjust Enrichment (alternative count, against PBGC). This count was pled in the alternative and alleged that PBGC was unjustly enriched by receiving and retaining the benefit of grain deliveries valued at $4,870,050.00 without remitting payment therefor, and that equity and good conscience required restitution.
Service of process was completed on May 24, 2022, on both defendants. PBGC was served through its registered agent, Ridgeline Corporate Services LLC, at its designated address in Springfield, Illinois, in accordance with 735 ILCS 5/2-204. Mr. Musgrave was personally served at his residence at 1188 Windermere Lane, Champaign, Illinois 61822, in accordance with 735 ILCS 5/2-203. Proof of service was filed with the Clerk of the Circuit Court on May 31, 2022.
On June 27, 2022, PBGC and Mr. Musgrave, through their then-counsel, Douglas M. Harkin of Bartlett, Reyes Linley CPAs LLP & Harkin LLP, filed an Answer and Affirmative Defenses to the Complaint. The defendants generally denied liability and asserted three affirmative defenses: (1) force majeure, citing a fire at PBGC's grain elevator facility in Macon County, Illinois, in September 2021, which allegedly disrupted operations and rendered performance commercially impracticable; (2) commercial impracticability under Section 2-615 of the Uniform Commercial Code, as adopted in Illinois; and (3) failure to mitigate damages, alleging that GAP failed to take reasonable steps to resell the grain delivered to PBGC or otherwise minimize its losses.
2(c). Motion Practice
On July 15, 2022, Calderwood & Harkness filed a Motion to Strike Affirmative Defenses on behalf of GAP, challenging the legal sufficiency of each of the three asserted affirmative defenses. The motion argued, among other things, that the force majeure clause contained in Section 9.1 of the Off-Take Agreement, by its express terms, excused only delivery and performance obligations—not payment obligations—and that the clause's enumerated triggering events did not encompass a fire at a buyer's own facility. The motion further argued that commercial impracticability under UCC Section 2-615 was inapplicable because PBGC was the buyer, not the seller, and because the Macon County elevator fire affected only one of PBGC's six operational grain storage and handling facilities, leaving the remaining five facilities fully operational and capable of receiving and processing grain.
The motion was fully briefed following the filing of the defendants' response on August 5, 2022, and GAP's reply brief on August 15, 2022. On August 22, 2022, Judge Delacroix heard oral argument and entered an order granting the Motion to Strike as to the first affirmative defense (force majeure) and the second affirmative defense (commercial impracticability), finding that neither defense was legally sufficient as pled. The Court denied the Motion to Strike as to the third affirmative defense (failure to mitigate), holding that the defense was legally cognizable and sufficiently pled to survive a motion to strike, although the Court noted that the burden of proving failure to mitigate would rest with the defendants at trial.
This ruling was a significant favorable development in the case, as it eliminated PBGC's primary substantive defenses and narrowed the remaining contested issues to the question of mitigation.
2(d). Discovery Phase
A Case Management Conference was held before Judge Delacroix on September 12, 2022, at which the Court set a discovery schedule and established deadlines for the completion of written discovery, depositions, and dispositive motions. The discovery period was set to close on March 15, 2023.
On September 30, 2022, Calderwood & Harkness served GAP's First Set of Interrogatories (consisting of twenty-four interrogatories) and GAP's First Request for Production of Documents (consisting of thirty-seven document requests) on defendants' counsel. The interrogatories sought detailed information regarding PBGC's financial condition, the Macon County fire, PBGC's insurance claims, and the basis for each affirmative defense. The document requests sought, among other things, PBGC's financial statements, bank records, insurance policies and claims correspondence, the Macon County fire report, and all communications between PBGC and its creditors.
On October 14, 2022, Calderwood & Harkness served GAP's Requests for Admission on the defendants, consisting of twenty-one requests. These requests sought admissions regarding the authenticity and execution of the Off-Take Agreement, the authenticity of each of the five unpaid invoices, the delivery and acceptance of the grain shipments underlying each invoice, and the amounts owed by PBGC to GAP. As discussed below, the defendants' counsel withdrew before responses to these discovery requests were served.
2(e). Defense Counsel Withdrawal
On November 4, 2022, Bartlett, Reyes Linley CPAs LLP & Harkin LLP filed a Motion to Withdraw as counsel for PBGC and Darren K. Musgrave, citing the defendants' non-payment of legal fees and the breakdown of the attorney-client relationship. The motion was noticed for hearing on November 18, 2022.
On November 18, 2022, Judge Delacroix granted the Motion to Withdraw, effective immediately. Neither PBGC nor Mr. Musgrave appeared at the hearing, nor did they file any opposition to the withdrawal motion. The Court's order granting withdrawal noted that PBGC, as a corporate entity, could not appear pro se under Illinois law and directed PBGC to retain substitute counsel within thirty (30) days or face potential entry of default. No substitute counsel was ever retained by PBGC.
As a consequence of counsel's withdrawal, no responses were ever served to GAP's First Set of Interrogatories, First Request for Production of Documents, or Requests for Admission. Under Illinois Supreme Court Rule 216(c), the Requests for Admission were deemed admitted by operation of law upon the expiration of the twenty-eight-day response period without response.
2(f). Receivership and Automatic Stay
On November 28, 2022, before the expiration of the thirty-day period for PBGC to retain substitute counsel, Heartland Prairie Bank, N.A.—PBGC's senior secured lender—filed a Verified Petition for Appointment of Receiver over PBGC in the Circuit Court of Sangamon County, Illinois, Chancery Division, Case No. 2022-CH-001247. The petition alleged that PBGC was in default under its credit facility with Heartland Prairie Bank, that PBGC was insolvent and operating at a loss, and that the appointment of a receiver was necessary to preserve and protect the assets of PBGC for the benefit of all creditors.
On December 12, 2022, following an evidentiary hearing, the Sangamon County Court (the Honorable Michael P. Brennan, Judge Presiding) entered an Order Appointing Receiver, designating Gareth J. Whitmore of Whitmore Strauss Advisory LLC as receiver for all assets and operations of PBGC. The receivership order granted broad authority to Mr. Whitmore to take possession and control of all assets of PBGC, operate the business, investigate claims against and by PBGC, and administer the orderly liquidation or disposition of PBGC's assets. Critically, the order included an automatic stay of all pending litigation against PBGC, prohibiting the commencement or continuation of any judicial, administrative, or other action or proceeding against PBGC or its assets without prior leave of the Sangamon County Court.
Calderwood & Harkness received formal notice of the receivership order and automatic stay on December 19, 2022, through service of the order by receiver's counsel, Joanna M. Lockridge of Lockridge Payne LLP. Upon receipt of this notice, Calderwood & Harkness immediately advised GAP of the receivership and its implications for the Cook County litigation.
The automatic stay rendered further prosecution of the Cook County action against PBGC impracticable and legally impermissible absent leave of the Sangamon County Court. Given the circumstances, and in consultation with GAP, Calderwood & Harkness determined that the appropriate course of action was to assert GAP's claims in the receivership proceeding and to voluntarily dismiss the Cook County action without prejudice, thereby preserving all of GAP's rights while avoiding unnecessary litigation costs.
2(g). Assertion of Claims in Receivership
On January 10, 2023, Calderwood & Harkness transmitted a formal letter to receiver's counsel, Joanna M. Lockridge at Lockridge Payne LLP, 120 South Sixth Street, Suite 1800, Springfield, Illinois 62701, formally notifying the receiver of GAP's pending claims against PBGC and requesting information regarding the claims submission process and the schedule for administration of the receivership estate.
On January 30, 2023, Calderwood & Harkness timely filed a Proof of Claim on behalf of GAP in the Sangamon County receivership proceeding, Case No. 2022-CH-001247, in accordance with the claims bar date and procedures established by the receiver. GAP's Proof of Claim asserts a total unsecured claim of approximately $5,664,428.85, calculated as follows:
The Proof of Claim was accompanied by the following supporting exhibits: (i) a certified copy of the Off-Take Agreement, including all exhibits and amendments; (ii) copies of the five unpaid invoices; (iii) a copy of the pre-suit demand letter dated April 11, 2022; (iv) copies of all forbearance correspondence between GAP and PBGC; and (v) a detailed interest calculation spreadsheet setting forth the accrual of contractual interest on each invoice from its respective due date through December 31, 2022, at the rate of 1.5% per month.
3. Current Status and Preserved Claims
3(a). Receivership Claim
GAP's Proof of Claim remains pending in the Sangamon County receivership proceeding, Case No. 2022-CH-001247. To date, no order has been entered allowing or disallowing the claim, and we understand that the receiver is still in the process of reviewing and reconciling claims submitted by creditors of PBGC.
GAP's claim is classified as unsecured. As you are aware, PBGC's assets are encumbered by Heartland Prairie Bank, N.A.'s prior perfected security interest under Article 9 of the Uniform Commercial Code, covering substantially all of PBGC's personal property, including inventory, accounts receivable, equipment, and general intangibles. We understand that Heartland Prairie Bank's outstanding balance under its credit facility with PBGC is approximately $31.4 million against a $45 million aggregate commitment. Heartland Prairie Bank's secured claim will be satisfied in full before any distributions are made to unsecured creditors.
Based on publicly available information and filings in the receivership proceeding, PBGC's total reported liabilities are estimated at approximately $58 million to $62 million against total assets with an estimated value of $35 million to $40 million. This presents a significant shortfall for unsecured creditors, and it is likely that any distribution to unsecured creditors will represent a fraction of the total amounts claimed. We will, of course, continue to monitor these developments and keep you informed should GAP elect to engage Calderwood & Harkness for representation in the receivership proceeding.
The receivership proceeding continues to be administered by Gareth J. Whitmore of Whitmore Strauss Advisory LLC, with counsel Lockridge Payne LLP.
3(b). Musgrave Guaranty Claim
It is important to note that the voluntary dismissal of the Cook County action was entered without prejudice as to all defendants, including Darren K. Musgrave individually. Accordingly, GAP's claim under Mr. Musgrave's personal guaranty of PBGC's payment obligations—executed as Exhibit D to the Off-Take Agreement—is fully preserved.
The Musgrave Guaranty is a continuing guaranty of all payment obligations of PBGC under the Off-Take Agreement, subject to a cap of $2,000,000.00 in aggregate liability. GAP retains the unqualified right to refile the guaranty claim against Mr. Musgrave in an appropriate court, subject to applicable statutes of limitations, should GAP elect to pursue the personal guaranty claim independently of the receivership proceeding.
We note that Mr. Musgrave's personal obligation under the Musgrave Guaranty may not be subject to the automatic stay entered in the Sangamon County receivership proceeding, as the stay by its terms applies to actions against PBGC and PBGC's assets, rather than to actions against individual guarantors in their personal capacity. However, further analysis of the scope of the receivership stay, the potential interplay between GAP's claim in the receivership and a separate guaranty action, and Mr. Musgrave's personal financial condition would be required before commencing a separate action against Mr. Musgrave. If GAP wishes to explore this avenue, we would be pleased to provide a detailed assessment upon the establishment of a new engagement.
3(c). Right to Refile the Cook County Action
The dismissal without prejudice under 735 ILCS 5/2-1009 preserves GAP's right to refile the Cook County action—or to file a new action—against PBGC and/or Mr. Musgrave in the event that the Sangamon County receivership stay is lifted, the receivership concludes without full satisfaction of GAP's claim, or circumstances otherwise warrant renewed litigation.
We respectfully remind you, however, that applicable statutes of limitations will continue to run during the period of dismissal. Under Illinois law, the statute of limitations for breach of a written contract is ten years (735 ILCS 5/13-206), calculated from the date of each breach (i.e., the date each invoice became past due). GAP should be mindful of these limitation periods in connection with any decision regarding the timing of future action. Should GAP desire a detailed analysis of the applicable limitation dates for each claim, we are available to provide that analysis upon request.
4. Summary of Fees and Costs
Set forth below is a summary of the total professional fees and costs billed to GAP for Calderwood & Harkness's representation in Matter No. 1020-00005 through the conclusion of the engagement:
Costs and disbursements include filing fees, service of process fees, court reporter fees for hearing transcripts, legal research charges (Westmark Data Systems), copying and production costs, and related out-of-pocket expenses. A detailed breakdown of all fees and costs is set forth in the Final Invoice Summary and Fee Statement, which has been separately transmitted to your attention and is enclosed with this letter.
As noted in Section 2(g) above, the total amount of attorneys' fees and costs ($302,037.85) has been included as a component of GAP's Proof of Claim in the Sangamon County receivership proceeding, pursuant to the prevailing-party attorneys' fees provision set forth in Section 12.4 of the Off-Take Agreement. To the extent any distribution is received from the receivership estate on account of the attorneys' fees component of the claim, such amounts would be payable to GAP.
5. Document Retention and File Disposition
Calderwood & Harkness will retain the complete matter file for Matter No. 1020-00005 in accordance with the firm's document retention policy, which provides for the retention of closed litigation files for a period of ten (10) years from the date of closure unless a shorter or longer retention period is required by applicable law, court order, or client instruction. Following the expiration of the retention period, the firm reserves the right to destroy the file in accordance with the firm's standard procedures, unless instructed otherwise by GAP.
Any original documents provided by GAP to Calderwood & Harkness during the course of the engagement—including, without limitation, original executed copies of the Off-Take Agreement and related exhibits, original invoices, and original correspondence—will be returned to GAP upon written request. Please direct any such request to my attention.
We strongly advise GAP to continue preserving all documents and records relating to the Off-Take Agreement, PBGC, and Darren K. Musgrave, including but not limited to financial records, correspondence, delivery records, internal memoranda, and electronic communications. The preservation obligation is particularly important given that the receivership proceeding remains pending in Sangamon County and GAP's claim under the Musgrave Guaranty is preserved. Premature destruction of relevant documents could prejudice GAP's ability to prosecute its claims in the receivership proceeding or in any future litigation.
6. Recommendation for Ongoing Monitoring
Although Matter No. 1020-00005 is being formally closed on Calderwood & Harkness's records, we recommend that GAP actively monitor the Sangamon County receivership proceeding, Case No. 2022-CH-001247, for significant developments. Key events to monitor include, but are not limited to:
• Any interim or final distributions to creditors of PBGC, including the schedule and percentage of distributions to the unsecured creditor class;
• Any motions or orders regarding the allowance or disallowance of claims filed in the receivership, including GAP's Proof of Claim;
• Any objections to GAP's claim by the receiver, Heartland Prairie Bank, or other parties in interest;
• The ultimate disposition of PBGC's assets, whether through liquidation, sale as a going concern, or other disposition;
• Any modification or lifting of the automatic stay, which could affect GAP's ability to resume the Cook County litigation or to pursue a separate action against Mr. Musgrave; and
• Any developments relating to Triton Mutual Insurance Co. coverage litigation proceeds, which, if resolved favorably, could augment the receivership estate and potentially improve recovery prospects for unsecured creditors.
If GAP wishes Calderwood & Harkness to continue representing GAP in the Sangamon County receivership proceeding—including monitoring the proceeding, responding to any objections to GAP's claim, and participating in distributions—or to pursue the Musgrave Guaranty claim against Darren K. Musgrave individually, a new engagement letter and matter number would need to be established. We would be pleased to discuss the scope, terms, and anticipated costs of any such engagement at your convenience.
7. Closing
On behalf of Calderwood & Harkness, I wish to express our sincere appreciation for the opportunity to represent Greenfield Agricultural Partners LLC in this matter. We understand the significance of the amounts at stake and the importance of GAP's commercial relationships in the grain trading industry, and we remain committed to assisting GAP in achieving the best possible outcome in the receivership proceeding and with respect to the preserved guaranty claim, should GAP elect to engage our firm for continued representation.
Please do not hesitate to contact me directly with any questions regarding this letter, the receivership claim, the preserved Musgrave Guaranty claim, or any other matter in which we may be of assistance.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Francesca Morano Partner Direct: (312) 555-7244
Email: fmorano@calderwoodharkness.com
cc:
Margaret A. Greenfield-Wu, President and Chief Operating Officer, Greenfield Agricultural Partners LLC Caleb Jennings, Director of Grain Operations, GAP Grain Trading Division Samuel Eklund, Partner, Calderwood & Harkness LLP Hannah Brinkley, Associate, Calderwood & Harkness LLP
Enclosures:
1. Copy of Order of Voluntary Dismissal Without Prejudice dated February 17, 2023 (Circuit Court of Cook County, Illinois, Case No. 2022-L-004831)
2. Final Invoice Summary and Fee Statement — Calderwood & Harkness LLP Matter No. 1020-00005
Invoice No. | Invoice Date | Commodity | Amount
GAP-2021-3187 | September 22, 2021 | #2 Yellow Corn | $892,500.00
GAP-2021-3244 | October 18, 2021 | #1 Yellow Soybeans | $936,750.00
GAP-2021-3301 | November 15, 2021 | #2 Yellow Corn | $1,224,000.00
GAP-2021-3358 | December 10, 2021 | #1 Yellow Soybeans | $741,600.00
GAP-2022-0042 | January 14, 2022 | #2 Yellow Corn | $1,075,200.00
Total Principal | $4,870,050.00
Component | Amount
Principal (five unpaid invoices) | $4,870,050.00
Accrued contractual interest through December 31, 2022 (calculated at 1.5% per month on each invoice from its respective due date) | $492,341.00 (approx.)
Attorneys' fees and costs (pursuant to Section 12.4 of the Off-Take Agreement, prevailing-party provision) | $302,037.85
Total Claim | $5,664,428.85 (approx.)
Category | Amount
Total professional fees billed through January 31, 2023 | $287,415.50
Total costs and disbursements | $14,622.35
Total amount billed — Matter No. 1020-00005 | $302,037.85

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