PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT PRIVILEGE
This memorandum is a privileged and confidential communication prepared by counsel in anticipation of litigation. It is protected by the attorney-client privilege and the work-product doctrine. It is intended solely for the use of the named recipient and is not to be disclosed to any third party without the express written consent of Calderwood & Harkness LLP.
INTERNAL MEMORANDUM
FROM: Francesca Morano, Partner, Calderwood & Harkness LLP
TO: Samuel Eklund, Partner, Calderwood & Harkness LLP
DATE: April 5, 2022
RE: Case Assessment — Greenfield Agricultural Partners LLC v. Prairie Basin Grain Co. and Darren K. Musgrave — Merits, Damages, and Collectability
MATTER NO.: 1020-00005
COPIES: File
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I. Executive Summary
Calderwood & Harkness LLP was engaged by Greenfield Agricultural Partners LLC ("GAP") on March 22, 2022, to pursue a breach-of-contract collection action against Prairie Basin Grain Co. ("PBGC") and Darren K. Musgrave individually. This memorandum sets forth my assessment of the merits of GAP's claims, the damages available, and the collectability of any judgment obtained. It is intended to guide our litigation strategy and to support the recommendation that we present to GAP regarding the filing of suit.
The total principal outstanding under the Master Grain Purchase and Off-Take Agreement dated March 15, 2019 (the "Off-Take Agreement") is $4,870,050.00, representing five unpaid invoices for deliveries of #2 Yellow Corn and #1 Yellow Soybeans made by GAP to PBGC between September 2021 and January 2022. Accrued interest continues to run at the contractual rate of 1.5% per month (18% per annum) pursuant to Section 7.3 of the Off-Take Agreement. As of the anticipated filing date, total accrued interest is estimated at approximately $345,992, bringing the total claim at filing to approximately $5,216,042.
Additionally, Darren K. Musgrave, PBGC's President and 72% shareholder, executed a limited personal guaranty of PBGC's payment obligations, capped at $2,000,000, which is attached as Exhibit D to the Off-Take Agreement. This guaranty is absolute and unconditional, providing a separate enforcement avenue against Musgrave individually, independent of PBGC's financial condition.
A formal pre-suit demand letter was sent on April 11, 2022, to both PBGC and Musgrave individually, demanding payment of all five outstanding invoices plus accrued interest within fifteen business days. The response period expires on May 2, 2022. As of the date of this memorandum, no payment or substantive response has been received from either PBGC or Musgrave.
The merits of the breach-of-contract claim are strong. The Off-Take Agreement is a fully executed, written contract between sophisticated commercial parties. GAP performed its obligations by delivering grain in conformity with the Agreement. PBGC accepted the deliveries without objection and failed to pay the invoices within the contractual Net 30 payment terms. Critically, Musgrave acknowledged the outstanding debt in a February 3, 2022 email, which constitutes a powerful evidentiary admission and effectively negates any defense that the amounts owed were in dispute. Anticipated affirmative defenses — including force majeure, commercial impracticability, and failure to mitigate — are either legally infirm or factually weak.
The principal risk in this matter is collectability, not liability. PBGC is in severe financial distress. The combination of a catastrophic fire at its Macon County elevator facility (estimated loss of approximately $3.2 million), failed hedging strategies resulting in approximately $6.8 million in mark-to-market losses, and volatile commodity basis levels has created an acute cash-flow crisis. PBGC ceased paying trade creditors in January 2022. Its primary lender, Heartland Prairie Bank, N.A., holds a secured revolving credit facility and term loan with an aggregate commitment of $45 million, and likely holds a perfected security interest in substantially all of PBGC's assets. There is a material risk that PBGC may enter an insolvency proceeding — either a state-court receivership or a federal bankruptcy case — in the near term.
Notwithstanding these collectability concerns, I recommend that GAP proceed with filing suit promptly following the expiration of the pre-suit demand period. Filing suit secures GAP's legal rights, tolls applicable limitations periods, positions GAP favorably in any future insolvency proceeding, and enables enforcement of the Musgrave Guaranty as an independent recovery mechanism. The anticipated filing venue is the Circuit Court of Cook County, Illinois, County Department, Law Division, pursuant to the exclusive jurisdiction clause contained in Section 11.1 of the Off-Take Agreement.
The balance of this memorandum addresses the factual background, merits analysis, damages calculation, collectability assessment, and recommended litigation strategy in detail.
II. Background and Factual Summary
A. The Parties
1. Greenfield Agricultural Partners LLC
Greenfield Agricultural Partners LLC ("GAP") is a Delaware limited liability company with its principal place of business at 1400 Grand Prairie Boulevard, Suite 800, Des Moines, Iowa 50309. GAP's Federal Employer Identification Number is 47-3821654. GAP is a strategic private company engaged in large-scale grain origination, commodity trading, agricultural chemicals, and crop input supply across the Midwest. In fiscal year 2021, GAP reported approximate annual revenue of $620 million, placing it among the larger independent agribusiness operators in the central United States.
GAP's leadership includes Thomas R. Greenfield, who serves as Chairman and Chief Executive Officer, and Margaret A. Greenfield-Wu, who serves as President and Chief Operating Officer. The GAP Grain Trading Division — the business unit that originated and administered the Off-Take Agreement at issue in this matter — is managed by Caleb Jennings, Director of Grain Operations. Mr. Jennings is our principal client contact for operational and factual matters and has been cooperative and responsive in providing documentation and information to support this engagement. GAP's Illinois registered agent is Capitol Registered Agents Inc., located at 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606. GAP is in good standing in both its state of formation (Delaware) and in Illinois, where it is registered to do business as a foreign limited liability company.
2. Prairie Basin Grain Co.
Prairie Basin Grain Co. ("PBGC") is an Illinois corporation with its principal office at 4520 Harvest Road, Champaign, Illinois 61820. PBGC's Federal Employer Identification Number is 37-4295018. PBGC is a regional grain elevator operator, off-taker, and merchandiser serving the central Illinois agricultural market. It operates six grain elevator facilities across Champaign, Macon, and Piatt Counties in Illinois. In fiscal year 2021, PBGC reported estimated annual revenue of approximately $185 million.
PBGC's ownership and management structure is closely held and family-dominated. Darren K. Musgrave serves as President and sole director of the corporation and holds 72% of PBGC's outstanding shares. Lydia R. Musgrave, Darren's spouse, holds 18% of the outstanding shares and serves as Secretary and Treasurer. Victor P. Novotny, PBGC's Vice President of Operations, holds the remaining 10% of outstanding shares. The closely held nature of the corporation and the concentration of ownership and control in Darren Musgrave are noteworthy for several reasons, including the personal guaranty analysis discussed below and potential discovery into the comingling of corporate and personal assets.
PBGC's Illinois registered agent is Ridgeline Corporate Services LLC, located at 77 West Washington Street, Suite 1420, Chicago, Illinois 60602. PBGC's historical auditor is Mercer Tidwell & Associates PC, a certified public accounting firm located in Champaign, Illinois. The engagement partner is Joan F. Tidwell, CPA. PBGC's most recent audited financial statements available to GAP are from fiscal year 2020; we have not yet obtained audited or unaudited statements for fiscal year 2021, and such statements will be an early and critical discovery target.
3. Darren K. Musgrave
Darren K. Musgrave is an individual who resides at 1188 Windermere Lane, Champaign, Illinois 61822. He is the President, sole director, and 72% shareholder of PBGC. In addition to his role as the signatory to the Off-Take Agreement on behalf of PBGC, Musgrave executed a limited personal guaranty of PBGC's payment obligations under the Off-Take Agreement, as further discussed in Section II.C below. Musgrave is being named as a defendant in his individual capacity based on his obligations under that personal guaranty.
B. The Off-Take Agreement
The operative contract giving rise to GAP's claims is the Master Grain Purchase and Off-Take Agreement (the "Off-Take Agreement"), fully executed on March 15, 2019, between GAP, as Seller, and PBGC, as Buyer. The Off-Take Agreement governs the purchase and sale of grain on a forward-contract basis over a five-year term commencing March 15, 2019 and continuing through March 14, 2024.
Under the Off-Take Agreement, PBGC agreed to purchase specified quantities of #2 Yellow Corn and #1 Yellow Soybeans from GAP, with delivery to PBGC's elevator facilities located in Champaign, Macon, and Piatt Counties, Illinois. The volume commitments required PBGC to purchase a minimum of 1,200,000 bushels of corn per contract year and a minimum of 600,000 bushels of soybeans per contract year. These minimum volume commitments were a material inducement for GAP to enter into the long-term relationship with PBGC, as they provided GAP with a reliable outlet for a significant portion of its Midwest grain origination.
Pricing under the Off-Take Agreement is determined by reference to the Chicago Board of Trade ("CBOT") nearby futures price at the time of delivery, plus or minus a negotiated basis differential set on a quarterly basis pursuant to the terms and methodology described in Exhibit B to the Agreement. This pricing mechanism is standard in the grain industry and reflects arm's-length commercial terms between sophisticated commodity market participants.
The payment terms under the Off-Take Agreement require PBGC to pay each invoice within thirty days of the date of delivery and acceptance of grain at the applicable elevator facility (i.e., Net 30 terms). Section 7.3 of the Off-Take Agreement provides that any amounts not paid when due shall bear interest at the rate of 1.5% per month (equivalent to 18% per annum), compounding monthly, from the due date until paid in full. This late-payment interest rate, while above the general statutory rate, is a negotiated term between sophisticated commercial parties and is enforceable under Illinois law, as discussed further in the damages analysis below.
The following additional provisions of the Off-Take Agreement are relevant to this matter:
Governing Law (Section 11.1): The Off-Take Agreement is governed by and construed in accordance with the laws of the State of Illinois, without regard to conflicts-of-law principles.
Exclusive Jurisdiction (Section 11.1): The parties consented to 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 Agreement. This forum-selection clause dictates our filing venue.
Adequate Assurance of Performance (Section 8.2): The Off-Take Agreement permits either party to suspend its performance obligations upon reasonable grounds for insecurity regarding the other party's ability to perform its obligations. This provision mirrors the adequate assurance mechanism found in UCC § 2-609 and provided the contractual basis for GAP's suspension of deliveries on March 8, 2022.
Force Majeure (Section 9.1): The Agreement contains a force majeure clause excusing performance of certain obligations — specifically, delivery and acceptance obligations — in the event of specified force majeure events beyond a party's reasonable control, including acts of God, fire, flood, severe weather, governmental actions, and similar events. Notably, the force majeure provision by its terms applies to delivery and acceptance obligations and does not excuse payment obligations. This distinction will be important in addressing any force majeure defense raised by PBGC.
Prevailing Party Attorneys' Fees (Section 12.4): The Off-Take Agreement provides that the prevailing party in any action to enforce the Agreement shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing party. This provision is significant because it allows GAP to recover the costs of this litigation if it prevails, and it substantially reduces the net economic cost of pursuing the claim.
The Off-Take Agreement was negotiated at arm's length between two experienced agribusiness enterprises, each of which had access to legal counsel during the negotiation process. There are no known issues with the formation, consideration, or enforceability of the Agreement, and no party has at any time challenged the validity of the contract itself.
C. The Musgrave Guaranty
As an inducement for GAP to enter into the Off-Take Agreement, Darren K. Musgrave executed a limited personal guaranty of PBGC's payment obligations under the Off-Take Agreement. The guaranty is attached as Exhibit D to the Off-Take Agreement and was executed contemporaneously with the Agreement on March 15, 2019.
The key terms of the Musgrave Guaranty are as follows:
Guarantor: Darren K. Musgrave, individually.
Guaranteed Obligations: All payment obligations of PBGC arising under the Off-Take Agreement.
Cap: The guaranty is limited to a maximum aggregate liability of $2,000,000.
Nature of Guaranty: The guaranty is absolute and unconditional. It is not subject to any conditions precedent other than PBGC's failure to pay amounts due under the Off-Take Agreement. The guarantor waived any right to require the beneficiary (GAP) to proceed first against PBGC or to exhaust any remedies against PBGC before seeking recovery under the guaranty.
Governing Law and Jurisdiction: The guaranty incorporates by reference the governing law and jurisdiction provisions of the Off-Take Agreement (Illinois law; exclusive jurisdiction in Cook County, Illinois, or the Northern District of Illinois).
The Musgrave Guaranty is a critical component of GAP's recovery strategy. Because the guaranty is absolute and unconditional, GAP is not required to demonstrate that it has first exhausted its remedies against PBGC before proceeding against Musgrave. GAP may pursue both PBGC and Musgrave simultaneously, and recovery against Musgrave is independent of PBGC's solvency. The $2,000,000 cap on Musgrave's personal liability represents approximately 41% of the outstanding principal, and enforcement of the guaranty may provide the most realistic avenue for meaningful recovery in this matter if PBGC proves to be judgment-proof.
D. The Unpaid Invoices
GAP delivered grain to PBGC under the Off-Take Agreement in the ordinary course of business from the third quarter of 2021 through the first quarter of 2022. PBGC failed to pay five invoices, each of which was issued upon delivery and acceptance of grain at PBGC's elevator facilities. The following table summarizes the unpaid invoices:
Total Principal Outstanding: $4,870,050.00
Each of these invoices corresponds to a documented delivery of grain by GAP to PBGC at designated PBGC elevator facilities in Champaign, Macon, or Piatt Counties, Illinois. Each delivery was evidenced by delivery tickets, weight certificates, and quality/grade inspection records. In every instance, PBGC accepted delivery of the grain without objection as to quantity, quality, grade, or conformity with the terms of the Off-Take Agreement. None of the five invoices has been disputed by PBGC in any respect — neither as to the fact of delivery, the quantity delivered, the quality or grade of the grain, nor the pricing applied. This absence of any dispute, combined with Musgrave's written acknowledgment of the debt (discussed below), places GAP in a very strong evidentiary position.
E. Pre-Litigation Demand and Forbearance History
The chronology of GAP's pre-litigation collection efforts is as follows:
January 25, 2022: GAP's Director of Grain Operations, Caleb Jennings, sent a written demand to PBGC's Darren Musgrave requesting payment of three then-outstanding invoices — GAP-2021-3187, GAP-2021-3244, and GAP-2021-3301 — totaling $3,053,250.00. At that time, Invoice GAP-2021-3358 ($741,600) had also come due, but the January 25 demand focused on the three oldest invoices. Invoice GAP-2022-0042 had not yet been issued.
February 3, 2022: Musgrave responded to Jennings's demand via email. This email is of significant evidentiary importance. In it, Musgrave explicitly acknowledged the outstanding debt owed by PBGC to GAP and requested a 90-day forbearance period in which to arrange payment. Musgrave stated that PBGC was in active negotiations with Heartland Prairie Bank, N.A. to obtain additional financing to address its liquidity constraints. He did not dispute the amounts owed, nor did he raise any claim or defense regarding the quality or quantity of the grain delivered. We have preserved a copy of this email and will use it both as an evidentiary admission and in support of requests for admission during discovery.
February 14, 2022: GAP, acting in good faith and in an effort to facilitate an amicable resolution, agreed to a 60-day forbearance — not the 90 days Musgrave had requested. The forbearance was expressly conditioned on PBGC making a partial payment of Invoice GAP-2021-3187 in the amount of $892,500.00 by March 1, 2022. This condition was communicated to Musgrave in writing by Caleb Jennings. The purpose of the condition was to demonstrate PBGC's good faith and capacity to make even partial payments on the outstanding obligations.
March 1, 2022: PBGC failed to make the required partial payment of $892,500.00 by the deadline. The forbearance condition was thereby breached, and GAP was released from any obligation to continue forbearing.
March 8, 2022: GAP formally suspended all further deliveries of grain to PBGC under Section 8.2 of the Off-Take Agreement (Adequate Assurance of Performance). GAP had reasonable grounds for insecurity regarding PBGC's ability to perform its payment obligations, given the mounting unpaid invoices, the failed forbearance condition, and information reaching GAP through industry channels regarding PBGC's broader financial difficulties. No further deliveries have been made, and GAP's exposure has been capped at the five invoices identified above.
March 22, 2022: GAP retained Calderwood & Harkness LLP to pursue collection of the outstanding invoices and to advise on litigation strategy.
April 11, 2022: I sent a formal pre-suit demand letter on Calderwood & Harkness letterhead to PBGC, attention Darren K. Musgrave, President, at PBGC's principal office at 4520 Harvest Road, Champaign, Illinois 61820, and separately to Darren K. Musgrave in his individual capacity at his residence at 1188 Windermere Lane, Champaign, Illinois 61822. The demand letter identified all five outstanding invoices, stated the total principal outstanding of $4,870,050.00, demanded payment of all amounts owed together with accrued interest, and provided a 15-business-day period in which to respond and arrange payment. The demand letter further notified both PBGC and Musgrave that failure to respond or arrange payment within the demand period would result in the filing of suit without further notice.
May 2, 2022: The 15-business-day demand period expires. As of the date of this memorandum (April 5, 2022), no payment has been received and no substantive response has been received from either PBGC or Musgrave. I do not expect a response or payment prior to the expiration of the demand period, based on PBGC's pattern of non-communication since the March 1 forbearance breach.
The pre-litigation chronology demonstrates that GAP acted reasonably and in good faith throughout. GAP issued timely demands, offered a forbearance accommodation, imposed a reasonable condition on that forbearance, and suspended deliveries promptly when it became apparent that PBGC would not or could not pay. This record will be important in defeating any failure-to-mitigate defense that PBGC may raise.
F. PBGC's Financial Distress — Known Facts
Based on information provided by GAP's management, industry contacts, publicly available information, and the forbearance correspondence, the following facts regarding PBGC's financial condition are known or reasonably inferred:
Macon County Elevator Fire (October 17, 2021). On October 17, 2021, a fire occurred at PBGC's grain elevator facility located at 2200 County Road 1400 East, Decatur, Illinois 62521, in Macon County. The estimated loss from the fire is approximately $3.2 million, encompassing structural damage to the elevator, destruction of stored grain inventory, and related business interruption costs. Critically, PBGC's property insurance carrier, Triton Mutual Insurance Co., has disputed coverage on the grounds of an alleged lapse in premium payments by PBGC. We understand that separate coverage litigation between PBGC and Triton Mutual may be pending, although we have not yet confirmed the case caption, docket number, or venue. The disputed insurance coverage introduces significant uncertainty into PBGC's ability to recover the $3.2 million fire loss, and if coverage is ultimately denied, the full loss will rest on PBGC's already strained balance sheet.
Failed Hedging Strategy — Q4 2021. During the fourth quarter of 2021, PBGC suffered estimated mark-to-market losses of approximately $6.8 million arising from a failed hedging strategy involving short corn futures positions. The precise details of the hedging strategy are not known to us, but the magnitude of the losses — nearly four percent of PBGC's annual revenue — is extraordinary and suggests a material failure of risk management. These hedging losses, coming on top of the elevator fire, represent a combined loss event of approximately $10 million in a single fiscal quarter for a company with annual revenue of only approximately $185 million.
Cessation of Trade Payments — January 2022. According to information provided by Caleb Jennings and corroborated by other industry contacts, PBGC ceased paying its trade creditors in approximately January 2022. This is consistent with the timing of PBGC's failure to pay GAP's invoices and with the overall trajectory of PBGC's financial deterioration. GAP is likely not the only significant trade creditor with outstanding claims against PBGC.
Heartland Prairie Bank Relationship. PBGC's primary lender is Heartland Prairie Bank, N.A., headquartered at 300 East Main Street, Decatur, Illinois 62521. PBGC maintains a secured revolving credit facility and term loan under a Revolving Credit and Term Loan Agreement dated June 1, 2018, with an aggregate commitment of $45 million. The relationship manager for PBGC's account at Heartland Prairie Bank is Kenneth W. Aldrich, Senior Vice President, Agribusiness Lending. It is reasonable to assume — and discovery should confirm — that Heartland Prairie Bank holds a perfected security interest in substantially all of PBGC's assets under UCC Article 9, including inventory, accounts receivable, equipment, and general intangibles. If PBGC defaults on its bank obligations (which appears imminent or may have already occurred), Heartland Prairie Bank would have priority over unsecured trade creditors, including GAP, in any enforcement or distribution scenario.
Summary of Financial Distress. PBGC's financial condition is severely impaired. The combination of the elevator fire loss (approximately $3.2 million), the failed hedging losses (approximately $6.8 million), margin compression from volatile corn and soybean basis levels throughout the 2021–2022 crop year, and the general cessation of trade payments has created a cash-flow crisis of existential proportions for the company. While PBGC's exact balance sheet is not known to us at this time, the known loss events alone total approximately $10 million and likely exceed any reasonable estimate of PBGC's available equity cushion. This financial distress is the central challenge in this matter and drives both our collectability assessment and our litigation strategy.
III. Merits Analysis
A. Count I: Breach of Contract — Off-Take Agreement (Against PBGC)
GAP's primary claim is for breach of the Off-Take Agreement against PBGC. Under Illinois law, the elements of a breach-of-contract claim are well established: (1) the existence of a valid and enforceable contract, (2) plaintiff's performance of its obligations under the contract (or a showing that performance was excused), (3) defendant's breach of the contract, and (4) damages resulting from the breach. See, e.g., Inland Commercial Property Management, Inc. v. HOB Ltd. Partnership, 251 Ill. App. 3d 132, 139 (1st Dist. 1993); Priebe v. Autobarn, Ltd., 240 F.3d 584, 587 (7th Cir. 2001) (applying Illinois law). Each element is satisfied here.
Existence of a Valid and Enforceable Contract. The Off-Take Agreement is a fully executed, written agreement between two sophisticated commercial parties. It was negotiated at arm's length, is supported by adequate consideration (GAP's obligation to sell and deliver grain; PBGC's obligation to purchase, accept, and pay for grain), and contains all essential terms — including the identity of the parties, the subject matter, the price mechanism, payment terms, and duration. There are no known issues with contract formation, capacity, mutual assent, consideration, or any other element of enforceability. Neither party has ever challenged the validity of the Off-Take Agreement.
GAP's Performance. GAP performed its obligations under the Off-Take Agreement by delivering all grain specified in the five invoices at issue. The grain was delivered to PBGC's designated elevator facilities in Champaign, Macon, and Piatt Counties, Illinois, in conformity with the terms of the Agreement. Each delivery was accompanied by delivery tickets, weight certificates, and quality/grade inspection records documenting that the grain met the contractual specifications for #2 Yellow Corn or #1 Yellow Soybeans, as applicable. Critically, PBGC accepted delivery of the grain at its elevator facilities in every instance without objection. No disputes have been raised by PBGC — at any time — as to the quality, grade, quantity, or conformity of any delivery. GAP's performance is complete and unimpeachable.
PBGC's Breach. PBGC failed to pay five invoices totaling $4,870,050.00 within the Net 30 payment terms specified in the Off-Take Agreement. As of the date of this memorandum, all five invoices are past due, with the oldest invoice (GAP-2021-3187, due October 28, 2021) now approximately 160 days overdue and the most recent invoice (GAP-2022-0042, due February 18, 2022) approximately 45 days overdue. The failure to pay undisputed invoices for accepted deliveries of conforming grain within the contractual payment period constitutes a clear and material breach of the Off-Take Agreement.
Musgrave's February 3, 2022 Email Acknowledgment. Of particular evidentiary significance is the email sent by Darren Musgrave on February 3, 2022, in response to GAP's January 25, 2022 demand. In this email, Musgrave explicitly acknowledged the debt owed by PBGC to GAP. He did not dispute the amounts claimed, the quantities delivered, or the quality of the grain. He requested a 90-day forbearance and referenced negotiations with Heartland Prairie Bank for additional financing. This email constitutes a powerful admission against interest. It will be extremely difficult for PBGC to subsequently deny or contest the amounts owed, to claim that the invoices were disputed, or to assert any defense related to the quality or conformity of the deliveries. This admission significantly strengthens GAP's position and may support early disposition of the case on summary judgment.
Damages. GAP has suffered damages in the amount of the unpaid invoices ($4,870,050.00), plus accrued contractual interest at 1.5% per month, plus attorneys' fees and costs as provided under Section 12.4 of the Off-Take Agreement. These damages are discussed in detail in Section IV below.
Overall Assessment — Count I. The breach-of-contract claim is strong. All four elements are clearly satisfied, supported by comprehensive documentation, and bolstered by the defendant's own written admission. This claim should withstand any challenge at the pleading stage, survive summary judgment, and prevail at trial if the case reaches that stage.
B. Anticipated Defenses
Based on the known facts, we anticipate that PBGC may assert the following affirmative defenses. Each is assessed below.
1. Force Majeure
PBGC may assert that the October 17, 2021 fire at its Macon County elevator facility constitutes a force majeure event excusing its performance under the Off-Take Agreement.
Assessment: Weak defense. The force majeure clause in the Off-Take Agreement (Section 9.1) is drafted to apply to delivery and acceptance obligations, not to payment obligations. This is a critical distinction. The clause excuses a party's failure to deliver or accept grain in the event of specified force majeure events (including fire), but it does not excuse or defer the obligation to pay for grain that has already been delivered and accepted. Payment obligations under commercial contracts are generally considered absolute and unconditional — they are not excused by force majeure events that may impair the obligor's financial capacity. Illinois courts have consistently drawn this distinction. See, e.g., Hess Corp. v. Porsche Financial Services, Inc., 2013 IL App (1st) 121534 (force majeure does not excuse financial inability to perform).
Moreover, even if the force majeure clause were construed more broadly, the fire affected only one of PBGC's six elevator facilities. PBGC continued to accept deliveries of grain at its other facilities in Champaign and Piatt Counties after the fire. The impairment of a single facility does not excuse PBGC's payment obligations for grain that was actually delivered to and accepted at its operating facilities.
Recommendation: If PBGC raises a force majeure defense, we should promptly move to strike it under Section 2-619 of the Illinois Code of Civil Procedure, arguing that the force majeure clause does not, by its terms, apply to payment obligations, and that in any event, the fire did not prevent PBGC from accepting the grain at issue.
2. Commercial Impracticability
PBGC may assert that its financial distress renders performance commercially impracticable under UCC § 2-615 or the common-law doctrine of impracticability as recognized in Illinois.
Assessment: Very weak defense. The doctrine of commercial impracticability under Illinois law requires objective impossibility or impracticability — not mere financial difficulty, economic hardship, or even insolvency. A party's inability to pay its debts does not constitute impracticability. This principle is firmly established in Illinois and federal case law. See, e.g., Northern Illinois Gas Co. v. Energy Cooperative, Inc., 122 Ill. App. 3d 940, 952 (3d Dist. 1984) ("[F]inancial difficulty or economic hardship, even to the extent of insolvency or bankruptcy, does not excuse the performance of a contractual obligation."); Restatement (Second) of Contracts § 261 cmt. d (1981) ("A mere change in the degree of difficulty or expense due to such causes as ... a rise or a collapse in the market ... does not amount to impracticability since it is this sort of risk that a fixed-price contract is intended to cover.").
PBGC's financial distress arises from the elevator fire, failed hedging strategies, and commodity market volatility — all of which are business risks inherent in the grain industry. These circumstances, however severe, do not render payment of the invoices objectively impracticable. They merely render it financially inconvenient or difficult. This defense should not survive a motion to strike.
3. Failure to Mitigate
PBGC may argue that GAP failed to mitigate its damages after PBGC's default, for example by continuing to deliver grain after it knew or should have known that PBGC was unable to pay.
Assessment: Moderate defense that could survive a motion to strike, but is ultimately unpersuasive on the facts. Under Illinois law, a non-breaching party has a duty to take reasonable steps to mitigate its damages. However, what constitutes "reasonable" mitigation depends on the circumstances, and the burden of proving failure to mitigate rests with the breaching party. See McClure v. Owl Drug Co., 308 Ill. 254, 260 (1923).
Here, the factual record strongly supports GAP's position that it acted reasonably at every stage. GAP issued timely payment demands. When Musgrave requested forbearance, GAP agreed to a 60-day forbearance period — shorter than the 90 days requested — conditioned on PBGC making a partial payment of the oldest outstanding invoice. When PBGC failed to meet that condition, GAP promptly suspended all further deliveries under Section 8.2 of the Off-Take Agreement on March 8, 2022. GAP did not continue to ship additional grain after it became clear that PBGC could not or would not pay. The record demonstrates precisely the kind of reasonable, measured response that mitigates further loss.
To the extent PBGC argues that GAP should have suspended deliveries earlier — for example, after the first invoice went unpaid — we would respond that GAP was acting in good faith in an ongoing commercial relationship, that the Off-Take Agreement's Net 30 payment terms and the industry custom of extending credit to grain off-takers make some degree of continued dealing commercially reasonable, and that the duty to mitigate does not require a creditor to assume the worst about its debtor immediately upon the first late payment.
Discovery may be needed to fully address the factual contours of this defense, but I am confident that the defense will not alter the ultimate outcome.
4. Other Defenses
No other substantive defenses are anticipated. PBGC has not at any time challenged the validity of the Off-Take Agreement, disputed the amounts invoiced, contested the quantity or quality of grain delivered, or asserted any counterclaim or offset. Musgrave's February 3, 2022 email effectively forecloses any such position. We should remain alert for any attempt by PBGC to raise a statute-of-frauds defense, a lack-of-authority defense, or other technical challenges to the contract, but none appears to have any basis on the current facts. The Off-Take Agreement is a written instrument signed by authorized representatives, and the deliveries at issue are comprehensively documented.
C. Count II: Breach of Personal Guaranty (Against Darren K. Musgrave)
The second count of the proposed complaint will assert breach of the limited personal guaranty executed by Darren K. Musgrave as Exhibit D to the Off-Take Agreement. Musgrave executed the guaranty as an inducement for GAP to enter into the Off-Take Agreement with PBGC. The guaranty is absolute and unconditional, guaranteeing PBGC's payment obligations up to a maximum aggregate amount of $2,000,000. The guaranty is not subject to any conditions precedent other than PBGC's failure to pay amounts due under the Off-Take Agreement.
PBGC's failure to pay the five outstanding invoices triggers Musgrave's obligations under the guaranty. GAP is not required to exhaust its remedies against PBGC before proceeding against Musgrave — the guaranty expressly waives any such requirement. Enforcement of the guaranty against Musgrave individually provides an additional and independent recovery avenue, capped at $2,000,000, that is not dependent on PBGC's solvency.
The guaranty is enforceable under Illinois law. It is a written instrument, signed by Musgrave, supported by adequate consideration (GAP's entry into the Off-Take Agreement, which provided PBGC with a valuable long-term grain supply arrangement benefiting Musgrave as the 72% shareholder), and clear and unambiguous in its terms. Under Illinois law, a guaranty supported by consideration and clearly expressing the guarantor's intent to be personally liable is enforceable. See, e.g., Fidelity & Deposit Co. of Maryland v. Stool, 607 F.2d 1306, 1312 (7th Cir. 1979) (applying Illinois law).
Musgrave's personal financial condition is currently unknown. We do not yet have information regarding his individual net worth, real property holdings, investment accounts, or other attachable assets. His 72% ownership interest in PBGC's outstanding shares may have little or no value if PBGC is insolvent. His primary residence at 1188 Windermere Lane, Champaign, Illinois 61822 may be subject to homestead exemptions under Illinois law, although such exemptions are limited in amount. Discovery and post-judgment asset investigation will be essential to assess the practical collectability of a judgment against Musgrave on the guaranty. This analysis is discussed further in Section V.C below.
D. Count III: Account Stated (Against PBGC)
The third count of the proposed complaint will assert an account stated claim against PBGC as an alternative theory supporting the same damages as the breach-of-contract claim. Under Illinois law, an account stated exists where there has been a course of prior dealings between the parties, the plaintiff renders a statement of account to the defendant showing a balance due, and the defendant retains the statement without objection for a reasonable period. See LaSalle Bank N.A. v. Cypress Creek 1, LP, 2014 IL App (1st) 130568, ¶ 35.
Here, GAP and PBGC had an ongoing commercial relationship under the Off-Take Agreement. GAP issued five invoices to PBGC, each specifying the date, commodity, quantity, per-bushel price, total amount, and due date. PBGC received and retained each invoice without raising any objection as to quantity, quality, price, or any other matter. Musgrave's February 3, 2022 email, in which he acknowledged the outstanding debt, further supports the conclusion that the parties had reached an implicit agreement on the amounts owed — i.e., an account stated.
While the account stated claim is an alternative to the breach-of-contract claim and does not independently increase GAP's recoverable damages, it provides a useful additional theory of liability. It simplifies proof, as it does not require the plaintiff to prove the underlying transaction in detail — only the rendering and acceptance of the account. It may also be useful at the summary judgment stage as an additional basis for entry of judgment.
E. Count IV: Unjust Enrichment (Against PBGC — Alternative)
The fourth count of the proposed complaint will assert unjust enrichment against PBGC, pleaded in the alternative in the event that any deficiency is found in the contractual claims. While we do not anticipate any such deficiency, pleading unjust enrichment as an alternative theory is prudent practice to preserve all available theories of recovery.
Under Illinois law, the elements of unjust enrichment are: (1) the defendant has received a benefit from the plaintiff, (2) the defendant's retention of the benefit is inequitable, and (3) the defendant has been unjustly enriched at the plaintiff's expense. See HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill. 2d 145, 160 (1989).
Here, PBGC received and accepted grain deliveries valued at $4,870,050.00 from GAP. PBGC has retained the benefit of those deliveries — the grain was accepted into PBGC's elevator facilities and presumably sold or consumed in PBGC's operations — without paying GAP. It would be unjust and inequitable for PBGC to retain this benefit. Accordingly, if the contractual claims fail for any reason, GAP would be entitled to recover the fair value of the grain delivered on an unjust enrichment theory.
This count provides a safety net. The breach-of-contract claim (Count I) and the account stated claim (Count III) are the primary theories of recovery, and both are strong. The unjust enrichment claim ensures that all bases are covered.
IV. Damages Analysis
A. Principal
The total principal outstanding is $4,870,050.00, representing the aggregate amount of the five unpaid invoices detailed in Section II.D above. Each invoice is supported by comprehensive documentation, including:
• Delivery tickets confirming the date, location, and quantity of each grain delivery;
• Weight certificates issued at the point of delivery documenting the number of bushels delivered;
• Quality and grade inspection records confirming that the grain met the contractual specifications for #2 Yellow Corn or #1 Yellow Soybeans, as applicable;
• PBGC's acceptance records, including receiving receipts or scale tickets generated at PBGC's elevator facilities confirming acceptance of each delivery.
No offsets, credits, or counterclaims have been asserted by PBGC or are known to GAP. PBGC has not at any time disputed the amount of any invoice, the quantity delivered, the quality or grade of the grain, or the pricing applied. The principal amount is fully documented and undisputed.
B. Accrued Contractual Interest
Section 7.3 of the Off-Take Agreement provides for interest on overdue amounts at the rate of 1.5% per month, which is equivalent to an annual rate of 18%. This interest accrues from each invoice's respective due date and continues until payment in full.
As of the anticipated filing date of approximately May 9, 2022 (one week after expiration of the demand period), the estimated accrued interest on each invoice is as follows:
Invoice GAP-2021-3187 (Due: 10/28/2021) Months overdue through May 9, 2022: approximately 6.37 months Interest: 6.37 × 1.5% × $892,500.00 = approximately $85,287
Invoice GAP-2021-3244 (Due: 11/14/2021) Months overdue through May 9, 2022: approximately 5.83 months Interest: 5.83 × 1.5% × $936,750.00 = approximately $81,920
Invoice GAP-2021-3301 (Due: 12/12/2021) Months overdue through May 9, 2022: approximately 4.90 months Interest: 4.90 × 1.5% × $1,224,000.00 = approximately $89,964
Invoice GAP-2021-3358 (Due: 01/07/2022) Months overdue through May 9, 2022: approximately 4.07 months Interest: 4.07 × 1.5% × $741,600.00 = approximately $45,275
Invoice GAP-2022-0042 (Due: 02/18/2022) Months overdue through May 9, 2022: approximately 2.70 months Interest: 2.70 × 1.5% × $1,075,200.00 = approximately $43,546
Total Estimated Accrued Interest Through May 9, 2022: Approximately $345,992
Interest will continue to accrue post-filing at the rate of $73,050.75 per month on the full principal amount (1.5% × $4,870,050.00) until judgment is entered or payment is made. Post-judgment interest will accrue at the rate specified in the judgment until satisfaction.
The 18% per annum contractual interest rate is enforceable under Illinois law for commercial transactions between sophisticated parties. Illinois does not impose usury limitations on commercial transactions between corporate entities or limited liability companies. See 815 ILCS 205/4(1)(c) (exempting business loans and commercial obligations from the general interest rate limitations). The parties negotiated this rate at arm's length as part of a comprehensive commercial agreement, and there is no basis for any challenge to its enforceability.
C. Attorneys' Fees and Costs
Section 12.4 of the Off-Take Agreement provides that the prevailing party in any action to enforce the Agreement shall be entitled to recover its reasonable attorneys' fees and costs from the non-prevailing party. This is a bilateral fee-shifting provision that was negotiated as part of the Agreement and is enforceable under Illinois law. See, e.g., Balcor Real Estate Partners v. Shulman, 171 Ill. App. 3d 1072 (1st Dist. 1988) (enforcing contractual attorneys' fee provision).
If GAP prevails in this action — as we expect — it will be entitled to recover the reasonable attorneys' fees and costs incurred in prosecuting its claims. The amount of recoverable fees will depend on the duration and complexity of the litigation, including whether the case proceeds through trial or is resolved at the summary judgment stage.
For reference, the current Calderwood & Harkness LLP hourly rates for the professionals assigned to this matter are:
Recoverable costs will include filing fees (approximately $392 for the initial complaint filing in Cook County), process server fees for service on PBGC's registered agent and on Musgrave individually, court reporter fees for any depositions taken, legal research charges, and other litigation expenses incurred in the ordinary course. A detailed budget estimate will be provided separately once a litigation timeline has been established.
D. Total Claimed Damages (At Filing)
Based on the foregoing analysis, the total amount to be claimed in the complaint at the anticipated filing date of approximately May 9, 2022 is summarized as follows:
The complaint will request judgment for the principal amount of $4,870,050.00, plus accrued and continuing contractual interest at the rate of 1.5% per month (18% per annum) from each invoice's respective due date until payment in full, plus reasonable attorneys' fees and costs incurred in prosecuting the action pursuant to Section 12.4 of the Off-Take Agreement, plus such other and further relief as the Court deems just and equitable.
E. Musgrave Guaranty — Separate Recovery
Darren K. Musgrave's liability under the personal guaranty is capped at $2,000,000. This cap applies to the aggregate amount recoverable from Musgrave under the guaranty, not to individual invoices. Recovery against Musgrave is independent of and in addition to recovery from PBGC, subject only to the limitation that GAP's total recovery from all defendants combined cannot exceed the total amount owed (principal, interest, fees, and costs).
The $2,000,000 guaranty cap represents approximately 41% of the outstanding principal of $4,870,050.00. While the guaranty does not provide coverage for the full amount owed, it offers a meaningful recovery avenue that is not contingent on PBGC's solvency. If PBGC proves uncollectable and Musgrave has sufficient personal assets, recovery of $2,000,000 under the guaranty would represent a significant partial recovery for GAP.
The guaranty does not appear to specify whether it covers accrued interest or attorneys' fees in addition to principal, or whether the $2,000,000 cap applies to the aggregate of all obligations including interest and fees. This ambiguity should be analyzed further; under Illinois law, a guaranty is generally construed strictly against the creditor, and any ambiguity in the scope of the guaranteed obligations may be resolved in the guarantor's favor. See Midland Hotel Corp. v. Reuben H. Donnelley Corp., 118 Ill. 2d 306 (1987). We should be prepared to argue that the cap applies to all guaranteed obligations (including interest and fees) and that recovery up to $2,000,000 is available on any component of the debt.
V. Collectability Assessment
A. PBGC's Financial Condition
As discussed in Section II.F, PBGC is in severe financial distress. The known loss events and financial pressures facing PBGC are summarized as follows:
• Macon County Elevator Fire (October 17, 2021): Estimated loss of approximately $3.2 million, including structural damage, destroyed grain inventory, and business interruption. Insurance coverage disputed by Triton Mutual Insurance Co. due to alleged premium lapse.
• Failed Hedging Strategy (Q4 2021): Estimated mark-to-market losses of approximately $6.8 million on short corn futures positions.
• Margin Compression: Volatile corn and soybean basis levels throughout the 2021–2022 crop year have compressed PBGC's operating margins on its core grain merchandising business.
• Combined Impact: The aggregate of the fire loss and hedging losses alone totals approximately $10 million — a catastrophic sum for a company with estimated annual revenue of $185 million and presumably modest operating margins typical of the grain elevator and merchandising sector (generally 1–3% of revenue).
• Cessation of Trade Payments: PBGC ceased paying trade creditors in approximately January 2022, indicating a severe liquidity crisis.
PBGC's primary lender, Heartland Prairie Bank, N.A., holds a secured revolving credit facility and term loan with an aggregate commitment of $45 million under the Revolving Credit and Term Loan Agreement dated June 1, 2018. Standard practice for agricultural lending of this nature strongly suggests that Heartland Prairie Bank holds a perfected security interest in substantially all of PBGC's assets under UCC Article 9, likely including:
• All grain inventory (at all elevator locations);
• All accounts receivable;
• All equipment (including elevator equipment, rolling stock, and office equipment);
• All general intangibles (including contract rights, permits, and licenses);
• All deposit accounts maintained at Heartland Prairie Bank; and
• Possibly real property (subject to separate mortgage instruments on PBGC's elevator sites).
If PBGC has defaulted on its obligations to Heartland Prairie Bank — or if the bank has exercised its right to accelerate the debt based on PBGC's deteriorated financial condition, cross-default provisions, or breach of financial covenants — then the bank would be in a position to foreclose on, or cause a receivership sale of, substantially all of PBGC's assets. In such a scenario, Heartland Prairie Bank would have priority as a senior secured creditor, and unsecured trade creditors such as GAP would recover only from any surplus remaining after the bank's claims are satisfied. Given the magnitude of the bank's $45 million commitment and the severity of PBGC's losses, it is likely that there would be little or no surplus available for unsecured creditors.
PBGC's estimated annual revenue of approximately $185 million does not, standing alone, indicate an ability to satisfy a $4.87 million judgment. Revenue is not equity, and a grain merchandising business with slim operating margins, extraordinary loss events totaling $10 million, and a $45 million secured lending facility has very limited capacity to absorb additional unsecured liabilities.
Risk Assessment: There is a significant risk that PBGC will be unable to satisfy a judgment in GAP's favor, either because PBGC lacks sufficient unencumbered assets to satisfy the judgment or because an insolvency proceeding will intervene before judgment can be obtained and enforced.
B. Risk of Insolvency Proceeding
Given PBGC's financial distress, there is a material risk that an insolvency proceeding may be initiated in the near term. This could take several forms:
State Court Receivership. Heartland Prairie Bank, as the senior secured creditor, may seek appointment of a receiver over PBGC's assets in Illinois state court. A receivership would effectively place PBGC's assets under court supervision and would prioritize repayment of the bank's secured claims. GAP's claim would be subordinated to the bank's position.
Federal Bankruptcy. PBGC itself may file for bankruptcy protection under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the Bankruptcy Code. Alternatively, creditors (including Heartland Prairie Bank or other trade creditors) may file an involuntary petition under Chapter 7 or Chapter 11. A bankruptcy filing would trigger the automatic stay under 11 U.S.C. § 362, which would immediately stay all pending collection actions and enforcement efforts against PBGC, including our Cook County litigation.
If PBGC enters receivership or bankruptcy, GAP's claim would become an unsecured, non-priority trade claim. Under the Bankruptcy Code's priority scheme, administrative expenses, priority claims (taxes, employee wages), and secured claims would all be satisfied before any distribution to unsecured trade creditors. Given the likely magnitude of Heartland Prairie Bank's secured claim, it is possible that unsecured creditors would receive little or no distribution.
The pending insurance coverage dispute with Triton Mutual Insurance Co. introduces an element of uncertainty. If PBGC prevails in the coverage litigation and obtains payment of the $3.2 million insurance claim, those proceeds could potentially benefit the estate and provide some distribution to unsecured creditors. However, the outcome of that dispute is uncertain, and even if coverage is obtained, the $3.2 million would likely be consumed by the bank's secured claim and other priority claims before any distribution reaches unsecured creditors.
We should monitor the situation closely for any indication that a receivership petition or bankruptcy filing is imminent. If an insolvency proceeding is commenced, we must be prepared to promptly file a proof of claim on behalf of GAP and to assess the impact on our Cook County litigation.
C. Darren K. Musgrave — Personal Assets
The Musgrave Guaranty provides a secondary but potentially valuable recovery path. While Musgrave's personal liability is capped at $2,000,000, this is a meaningful sum, and recovery against Musgrave does not depend on PBGC's solvency or on the outcome of any insolvency proceeding involving PBGC.
However, Musgrave's personal financial condition is unknown at this time. The following is known or can be reasonably inferred:
• Musgrave resides at 1188 Windermere Lane, Champaign, Illinois 61822. This property may be owned by Musgrave individually, jointly with his spouse Lydia R. Musgrave, or through a trust or other entity. A title search should be conducted to determine ownership, and any outstanding mortgage or lien obligations.
• Musgrave owns 72% of PBGC's outstanding shares. If PBGC is insolvent, these shares may have little or no value. Indeed, if PBGC's liabilities exceed its assets, Musgrave's equity interest is worthless as a practical matter.
• Lydia R. Musgrave, Darren's spouse, holds 18% of PBGC's shares and serves as Secretary and Treasurer. The Musgraves' marital property interests under Illinois law — a common-law property state, but one in which the Married Women's Property Act and equitable distribution principles apply in the event of dissolution — may complicate enforcement. If the Musgraves hold assets as tenants by the entirety (which is available for homestead property in Illinois), a judgment against Darren alone would not reach those assets. Discovery will be needed to determine the form of ownership of key assets.
• Musgrave may hold other personal assets — bank accounts, investment accounts, retirement accounts, other real property, vehicles, or interests in other business entities — that are not known to us at this time. Post-judgment discovery and asset investigation will be necessary to identify and reach these assets.
Discovery regarding Musgrave's personal financial condition should be prioritized early in the litigation. We should serve document requests and interrogatories directed specifically to Musgrave's individual financial condition, including requests for personal financial statements, tax returns, bank and brokerage account statements, real property records, and information regarding any transfers of assets made within the past two years (which could be subject to avoidance as fraudulent transfers under the Illinois Uniform Fraudulent Transfer Act, 740 ILCS 160/).
A judgment against Musgrave individually may have independent and significant value even if PBGC itself proves uncollectable. The guaranty provides a clear contractual basis for personal liability, and if Musgrave has assets beyond his PBGC shareholding, enforcement of the guaranty may be the most productive avenue of recovery in this matter.
D. Collectability Summary and Risk Rating
Overall Collectability Risk: HIGH
Full recovery of the $4,870,050.00 principal (plus interest, fees, and costs) from PBGC alone is unlikely in the near term, given the severity of PBGC's financial distress and the probable priority of Heartland Prairie Bank's senior secured claims. The following scenarios summarize the range of potential outcomes:
Best-Case Scenario: PBGC obtains additional financing or successfully resolves its insurance coverage dispute with Triton Mutual, injecting cash into the business sufficient to satisfy GAP's claim in full or in substantial part. Alternatively, Musgrave has sufficient personal assets to satisfy a judgment of up to $2,000,000 under the guaranty, and PBGC makes a partial payment from available resources, resulting in full or near-full recovery. Estimated recovery: 70–100% of principal. Assessment: Unlikely.
Moderate Scenario: PBGC makes a partial payment through a workout arrangement or structured settlement, and Musgrave satisfies a portion of his guaranty obligation. Alternatively, PBGC enters an insolvency proceeding, unsecured creditors receive a modest distribution (10–25 cents on the dollar), and Musgrave satisfies a portion of the guaranty. Estimated recovery: 30–50% of principal. Assessment: Possible.
Worst-Case Scenario: PBGC enters insolvency proceedings; Heartland Prairie Bank's secured claims consume all or substantially all of PBGC's assets; unsecured creditors receive pennies on the dollar or nothing; and Musgrave lacks personal assets sufficient to satisfy the guaranty. Estimated recovery: 0–15% of principal. Assessment: Possible.
Likely Scenario: Partial recovery through a combination of any distribution in an insolvency proceeding and enforcement of the Musgrave Guaranty. The timing and amount of recovery are uncertain and may be protracted. Estimated recovery: 25–45% of principal, realized over an extended period. Assessment: Most probable.
These assessments are preliminary and will be refined as additional information becomes available through pre-suit investigation, discovery, and monitoring of PBGC's financial condition and any insolvency proceedings.
VI. Recommended Litigation Strategy
A. Filing
I recommend that GAP file a four-count complaint in the Circuit Court of Cook County, Illinois, County Department, Law Division, immediately upon expiration of the pre-suit demand period on May 2, 2022. The filing should occur on or about May 9, 2022, allowing time for final preparation and client authorization.
The proposed complaint will include the following four counts:
Count I: Breach of Contract (Off-Take Agreement) against PBGC. Alleging PBGC's failure to pay five invoices totaling $4,870,050.00 in violation of its payment obligations under the Off-Take Agreement.
Count II: Breach of Personal Guaranty against Darren K. Musgrave. Alleging Musgrave's failure to honor his personal guaranty of PBGC's payment obligations, with liability capped at $2,000,000.
Count III: Account Stated against PBGC. Alleging that the invoices were rendered, received, and retained without objection, and that the parties' conduct — including Musgrave's February 3, 2022 email acknowledgment — establishes an account stated.
Count IV: Unjust Enrichment (Alternative) against PBGC. Pleaded in the alternative, alleging that PBGC received and retained the benefit of grain deliveries valued at $4,870,050.00 without payment, and that retention of such benefit is unjust and inequitable.
The complaint will seek judgment for the principal amount of $4,870,050.00, plus accru