1020-00005 · Greenfield Agricultural Partners · Receivership

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IN THE CIRCUIT COURT OF SANGAMON COUNTY, ILLINOIS

In the Matter of the Receivership of

PRAIRIE BASIN GRAIN CO., an Illinois corporation.

Case No. 2022-CH-001247

PROOF OF CLAIM OF GREENFIELD AGRICULTURAL PARTNERS LLC

Filed: January 30, 2023

Greenfield Agricultural Partners LLC ("GAP" or "Claimant"), by and through its undersigned attorneys, Calderwood & Harkness LLP, hereby submits this Proof of Claim against the receivership estate of Prairie Basin Grain Co. ("PBGC" or the "Debtor") and, in support thereof, states and avers as follows:

I. IDENTIFICATION OF CLAIMANT

A. Claimant Information

1. The Claimant is Greenfield Agricultural Partners LLC, a limited liability company duly organized and existing under the laws of the State of Delaware.

2. GAP's principal place of business is located at 1400 Grand Prairie Boulevard, Suite 800, Des Moines, Iowa 50309.

3. GAP's Federal Employer Identification Number ("FEIN") is 47-3821654.

4. GAP is a strategic private company engaged in large-scale grain origination, commodity trading, agricultural chemicals, and crop input supply across the Midwest. GAP operates grain origination facilities and trading operations in Iowa, Illinois, Indiana, Nebraska, and Minnesota, and maintains long-standing commercial relationships with grain elevators, cooperatives, and agricultural processors throughout the region.

5. GAP's authorized representative for purposes of this Proof of Claim is Thomas R. Greenfield, Chairman and Chief Executive Officer.

B. Claimant's Counsel

6. GAP is represented in this matter by the law firm of Calderwood & Harkness LLP, located at 225 West Wacker Drive, Suite 4000, Chicago, Illinois 60606. The lead attorney responsible for this matter is Francesca Morano, Partner. Additional counsel assisting with this matter is Hannah Brinkley, Lead Associate. Counsel may be reached at (312) 555-9400 (telephone) and (312) 555-9401 (facsimile). This matter is identified internally as C&H Matter No.: 1020-00005.

7. All correspondence, notices, pleadings, orders, and other communications relating to this Proof of Claim or the receivership proceeding should be directed to Calderwood & Harkness LLP at the address set forth above, to the attention of Francesca Morano and Hannah Brinkley. Electronic mail communications may be directed to fmorano@calderwoodharkness.com and hbrinkley@calderwoodharkness.com.

II. IDENTIFICATION OF DEBTOR / ENTITY IN RECEIVERSHIP

8. The entity in receivership against which this Proof of Claim is asserted is Prairie Basin Grain Co., an Illinois corporation, with its principal office located at 4520 Harvest Road, Champaign, Illinois 61820. PBGC's Federal Employer Identification Number is 37-4295018.

9. PBGC is a grain elevator operator and commodity merchandiser that, prior to the commencement of the receivership, operated grain storage, handling, and merchandising facilities in Champaign, Macon, and Piatt Counties, Illinois. PBGC purchased grain from producers and commercial counterparties, including GAP, for resale to processors, exporters, and end-users.

10. On December 12, 2022, this Court entered an Order Appointing Receiver (the "Receivership Order"), placing PBGC into receivership and appointing Gareth J. Whitmore, CPA, CIRA, of Whitmore Strauss Advisory LLC, as Receiver. Mr. Whitmore's office is located at 500 East Monroe Street, Suite 300, Springfield, Illinois 62701. The Receivership Order imposed an automatic stay of all pending and future actions against PBGC and its assets.

11. The Receiver is represented by Joanna M. Lockridge of the firm Lockridge Payne LLP, located at 120 South Sixth Street, Suite 1800, Springfield, Illinois 62701.

12. The Receivership Order, among other things, directed the Receiver to marshal and administer the assets of PBGC, to identify, adjudicate, and prioritize claims against the estate, and to establish a process for creditors to file proofs of claim. This Proof of Claim is filed in accordance with the procedures established by the Receiver and in compliance with the deadlines set forth in the Receivership Order and subsequent notices issued by the Receiver.

III. BASIS OF CLAIM

A. The Master Grain Purchase and Off-Take Agreement

13. On or about March 15, 2019, GAP (as Seller) and PBGC (as Buyer) entered into that certain Master Grain Purchase and Off-Take Agreement (the "Off-Take Agreement"), a comprehensive commercial contract governing the purchase and sale of grain commodities between the parties. A true and correct copy of the Off-Take Agreement, together with all exhibits, schedules, and amendments thereto, is attached hereto as Exhibit A and incorporated herein by reference.

14. The Off-Take Agreement has a five-year term, commencing on March 15, 2019 and expiring on March 14, 2024, unless earlier terminated in accordance with its terms. The Off-Take Agreement was negotiated at arm's length by the parties and their respective legal counsel, and was executed by authorized representatives of both GAP and PBGC.

15. Under the Off-Take Agreement, PBGC agreed to purchase specified quantities of #2 Yellow Corn and #1 Yellow Soybeans from GAP on a forward-contract basis, with delivery to be made to PBGC's elevator facilities located in Champaign, Macon, and Piatt Counties, Illinois (the "Delivery Points"). The Off-Take Agreement established minimum volume commitments, requiring PBGC to purchase no fewer than 1,200,000 bushels of #2 Yellow Corn per contract year and no fewer than 600,000 bushels of #1 Yellow Soybeans per contract year from GAP. These minimum volume commitments were a material inducement for GAP's entry into the Off-Take Agreement and were essential to GAP's grain origination planning, hedging strategy, and logistics operations.

16. The pricing mechanism under the Off-Take Agreement was based upon the Chicago Board of Trade ("CBOT") nearby futures price at the time of delivery, plus or minus a negotiated quarterly basis differential as set forth in Exhibit B to the Off-Take Agreement. The basis differential was renegotiated between the parties on a quarterly basis and reflected the local market conditions, transportation costs, and handling charges applicable to the Delivery Points. This pricing structure is standard and customary in the Midwest grain trade.

17. Section 6.1 of the Off-Take Agreement provided that payment for all grain delivered and accepted by PBGC was due and payable net thirty (30) days from the date of delivery and acceptance at the applicable elevator facility. Each delivery was evidenced by a scale ticket, a grain inspection certificate, and a corresponding invoice issued by GAP.

18. Section 7.3 of the Off-Take Agreement provided that any amounts not paid when due would bear interest at the rate of one and one-half percent (1.5%) per month, which is equivalent to eighteen percent (18%) per annum, compounded monthly, calculated from the date such payment was due until the date of actual payment. This late payment interest provision was a bargained-for element of the parties' agreement and was intended to compensate GAP for the costs and risks associated with extended payment delinquencies.

19. Section 12.4 of the Off-Take Agreement provides that in any action or proceeding to enforce the terms of the Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs of litigation from the non-prevailing party. This provision applies to all disputes arising out of or in connection with the Off-Take Agreement, including but not limited to claims for breach of contract and actions to collect amounts owed thereunder.

20. Section 13.9 of the Off-Take Agreement provides that the Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict of laws principles.

B. PBGC's Breach — Failure to Pay

21. From the third quarter of 2021 through the first quarter of 2022, GAP delivered grain to PBGC pursuant to the terms of the Off-Take Agreement. PBGC accepted delivery of all such grain at its elevator facilities, as evidenced by signed scale tickets, weight certificates, and grain grading certificates issued at the time of delivery. At no time did PBGC reject any delivery or raise any dispute regarding the quality, grade, weight, or condition of the grain delivered by GAP.

22. In connection with such deliveries, GAP issued five invoices to PBGC, each of which became due and payable in accordance with Section 6.1 of the Off-Take Agreement (net 30 days from delivery and acceptance). Despite due demand, PBGC failed to pay any of the five invoices, each of which remains outstanding and unpaid in full as of the date of this Proof of Claim. The five unpaid invoices are detailed in the table below:

23. The aggregate unpaid principal amount of the five invoices is $4,870,050.00. True and correct copies of all five invoices, together with the corresponding scale tickets and grain inspection certificates confirming delivery and acceptance, are attached hereto as Exhibit B and incorporated herein by reference.

24. Each of the foregoing invoices was transmitted to PBGC in the ordinary course of business, consistent with the invoicing practices established between the parties throughout the term of the Off-Take Agreement. PBGC never disputed the validity, accuracy, or amount of any of the five invoices.

C. Pre-Litigation Demand and Forbearance Efforts

25. Prior to retaining litigation counsel, GAP made repeated efforts to collect the amounts owed by PBGC and to resolve the payment dispute through commercial negotiations. The relevant chronology of events is as follows:

26. On January 25, 2022, Caleb Jennings, GAP's Director of Grain Operations, sent a formal written demand letter to Darren K. Musgrave, President of PBGC, demanding immediate payment of the three invoices that were then outstanding and past due — namely, Invoice GAP-2021-3187 ($892,500.00), Invoice GAP-2021-3244 ($936,750.00), and Invoice GAP-2021-3301 ($1,224,000.00) — in the aggregate amount of $3,053,250.00. The demand letter set forth the specific invoices, the amounts due, and the applicable late payment interest, and advised PBGC that failure to remit payment would result in a suspension of further deliveries and the commencement of legal proceedings.

27. On February 3, 2022, Darren K. Musgrave responded to Mr. Jennings' demand via electronic mail. In his email, Mr. Musgrave acknowledged the existence and amount of the outstanding debt owed to GAP and did not dispute the validity of any of the three invoices referenced in the demand letter. Mr. Musgrave stated that PBGC was experiencing temporary cash flow difficulties and was actively negotiating additional financing with Heartland Prairie Bank, N.A. ("Heartland Prairie Bank"), its senior secured lender. Mr. Musgrave requested a ninety (90)-day forbearance period to allow PBGC time to secure the necessary financing to satisfy its obligations to GAP.

28. In a good-faith effort to preserve the commercial relationship between the parties and to allow PBGC a reasonable opportunity to cure its payment defaults, GAP agreed, by letter dated February 14, 2022, to a limited sixty (60)-day forbearance period. GAP's agreement to forbear was expressly conditioned upon PBGC making an interim payment of Invoice GAP-2021-3187, in the amount of $892,500.00, on or before March 1, 2022, as a demonstration of good faith and financial capacity. The forbearance letter further stated that GAP's agreement to forbear was without prejudice to any of GAP's rights and remedies under the Off-Take Agreement or applicable law, and that the forbearance would terminate immediately upon PBGC's failure to make the required interim payment.

29. On March 1, 2022, the deadline for PBGC's required interim payment passed without PBGC making any payment whatsoever to GAP. PBGC failed to tender the $892,500.00 payment required under the conditional forbearance agreement, and did not communicate any explanation or request for further accommodation.

30. In light of PBGC's failure to satisfy the condition of the forbearance and its continued failure to pay any of the outstanding invoices, on March 8, 2022, GAP exercised its rights under Section 8.2 of the Off-Take Agreement (Adequate Assurance of Performance) and suspended all further deliveries of grain to PBGC. Section 8.2 provides, in relevant part, that where reasonable grounds for insecurity arise with respect to the performance of either party, the other party may in writing demand adequate assurance of due performance and, if commercially reasonable, suspend any performance for which it has not already received the agreed return. GAP's suspension of deliveries was commercially reasonable and justified under the circumstances, given PBGC's extended and worsening pattern of non-payment.

31. Copies of the January 25, 2022 demand letter from Caleb Jennings, the February 3, 2022 email response from Darren K. Musgrave, and the February 14, 2022 conditional forbearance letter from GAP are attached hereto as Exhibit C and incorporated herein by reference.

D. Pre-Suit Demand by Counsel

32. On April 11, 2022, Francesca Morano of Calderwood & Harkness LLP, acting on behalf of GAP, transmitted a formal pre-suit demand letter (the "Pre-Suit Demand") to Prairie Basin Grain Co. at its principal office and to Darren K. Musgrave individually at his residential address. The Pre-Suit Demand set forth in detail GAP's claims arising from PBGC's breach of the Off-Take Agreement, identified all five outstanding invoices (including the two additional invoices — GAP-2021-3358 and GAP-2022-0042 — that had come due since the prior demand), and demanded payment of the aggregate principal sum of $4,870,050.00, together with all accrued interest at the contractual rate, within fifteen (15) business days of receipt.

33. The Pre-Suit Demand further advised PBGC and Mr. Musgrave that, in the event of their failure to remit full payment within the specified period, GAP would commence litigation against both PBGC and Mr. Musgrave to recover all amounts owed, together with contractual interest, attorneys' fees, and costs.

34. The fifteen (15) business day demand period expired on or about May 2, 2022. PBGC and Mr. Musgrave failed to make any payment, and neither PBGC nor Mr. Musgrave responded to the Pre-Suit Demand in any manner.

35. A true and correct copy of the April 11, 2022 Pre-Suit Demand letter is attached hereto as Exhibit D and incorporated herein by reference.

E. Related Litigation

36. On May 9, 2022, having exhausted all pre-litigation collection efforts, GAP filed a four-count verified complaint (the "Complaint") against Prairie Basin Grain Co. and Darren K. Musgrave individually in the Circuit Court of Cook County, Illinois, County Department, Law Division, captioned Greenfield Agricultural Partners LLC v. Prairie Basin Grain Co. and Darren K. Musgrave, Case No. 2022-L-004831 (the "Cook County Action"). The four counts of the Complaint are as follows:

Count I — Breach of Contract (Off-Take Agreement) against PBGC: GAP alleged that PBGC breached the Off-Take Agreement by failing to pay the five invoices described herein, in the aggregate amount of $4,870,050.00, together with contractual interest, attorneys' fees, and costs.

Count II — Breach of Personal Guaranty against Darren K. Musgrave: GAP alleged that Mr. Musgrave breached his personal guaranty of PBGC's payment obligations under the Off-Take Agreement. As described more fully in Section VI.A below, the Musgrave Guaranty is capped at $2,000,000.00.

Count III — Account Stated against PBGC: GAP alleged that the five invoices constituted an account stated between the parties, inasmuch as PBGC received and retained the invoices without objection and, through Mr. Musgrave's February 3, 2022 email, expressly acknowledged the existence and amount of the underlying indebtedness.

Count IV — Unjust Enrichment (alternative) against PBGC: GAP alleged, in the alternative, that PBGC was unjustly enriched by its receipt and retention of 625,000 bushels of grain delivered by GAP, for which PBGC failed to pay.

37. Service of process on both PBGC and Darren K. Musgrave was completed on May 24, 2022, through a licensed process server in accordance with the Illinois Code of Civil Procedure.

38. On June 27, 2022, PBGC, through its then-counsel, Bartlett, Reyes Linley CPAs LLP & Harkin LLP (Douglas M. Harkin, lead counsel), filed its Answer and Affirmative Defenses to the Complaint. Among the affirmative defenses asserted by PBGC were force majeure and commercial impracticability, which PBGC contended excused its failure to pay due to alleged supply chain disruptions and unprecedented commodity price volatility.

39. On August 22, 2022, the Honorable Patricia Delacroix, presiding judge in the Cook County Action, granted GAP's Motion to Strike PBGC's force majeure and commercial impracticability affirmative defenses, finding that the Off-Take Agreement's force majeure clause did not encompass the conditions cited by PBGC and that PBGC's payment obligation — as distinguished from its performance of delivery or receipt obligations — was not subject to discharge on the basis of commercial impracticability. This ruling eliminated the only substantive defenses asserted by PBGC.

40. On November 4, 2022, Bartlett, Reyes Linley CPAs LLP & Harkin LLP filed a Motion to Withdraw as counsel for both PBGC and Darren K. Musgrave in the Cook County Action, citing non-payment of legal fees by PBGC and Mr. Musgrave. The Court granted the Motion to Withdraw on November 18, 2022. As of that date, neither PBGC nor Mr. Musgrave had retained substitute counsel in the Cook County Action.

41. On December 19, 2022, GAP, through Calderwood & Harkness LLP, received formal notice of the Receivership Order and automatic stay entered by this Court on December 12, 2022. Upon receipt of such notice, GAP ceased all collection and litigation activity against PBGC in the Cook County Action in compliance with the automatic stay.

42. The Cook County Action is currently stayed with respect to PBGC by operation of the Receivership Order. GAP intends, in due course and at the appropriate time, to file a notice of voluntary dismissal without prejudice of the claims asserted against PBGC in the Cook County Action, while preserving and continuing to pursue its claims against Darren K. Musgrave individually, which claims are not subject to the automatic stay.

IV. AMOUNT OF CLAIM

A. Principal.

43. The total unpaid principal amount owed by PBGC to GAP under the Off-Take Agreement, representing the aggregate amount of the five outstanding and unpaid invoices described in Section III.B above, is $4,870,050.00, comprised as follows:

44. No partial payments have been received by GAP from PBGC, the Receiver, or any other party on account of any of the foregoing invoices. No credits, offsets, deductions, or allowances are applicable to any of the invoices, and none have been claimed by PBGC.

B. Accrued Interest

45. Pursuant to Section 7.3 of the Off-Take Agreement, all amounts not paid when due bear interest at the rate of one and one-half percent (1.5%) per month, which is equivalent to eighteen percent (18%) per annum. Interest is calculated on each invoice from its respective due date through December 31, 2022, the date selected by GAP for purposes of calculating interest in this Proof of Claim. The interest calculation for each invoice is summarized below:

(a) Invoice GAP-2021-3187 (Due Date: October 28, 2021): Interest accruing from October 28, 2021 through December 31, 2022, a period of approximately 14.1 months, on a principal amount of $892,500.00.

(b) Invoice GAP-2021-3244 (Due Date: November 14, 2021): Interest accruing from November 14, 2021 through December 31, 2022, a period of approximately 13.6 months, on a principal amount of $936,750.00.

(c) Invoice GAP-2021-3301 (Due Date: December 12, 2021): Interest accruing from December 12, 2021 through December 31, 2022, a period of approximately 12.6 months, on a principal amount of $1,224,000.00.

(d) Invoice GAP-2021-3358 (Due Date: January 7, 2022): Interest accruing from January 7, 2022 through December 31, 2022, a period of approximately 11.8 months, on a principal amount of $741,600.00.

(e) Invoice GAP-2022-0042 (Due Date: February 18, 2022): Interest accruing from February 18, 2022 through December 31, 2022, a period of approximately 10.4 months, on a principal amount of $1,075,200.00.

46. The total accrued interest through December 31, 2022 is approximately $492,341.00. A detailed interest calculation spreadsheet, setting forth the computation of interest on each invoice on a monthly basis at the contractual rate, is attached hereto as Exhibit E and incorporated herein by reference.

47. Claimant expressly reserves the right to assert additional interest accruing after December 31, 2022, at the contractual rate of 1.5% per month (18% per annum), to the extent permitted by applicable law and by any order of this Court governing the allowance and priority of claims in this receivership proceeding. Interest on the unpaid principal continues to accrue on a daily basis.

C. Attorneys' Fees and Costs

48. Pursuant to Section 12.4 of the Off-Take Agreement, the prevailing party in any action or proceeding to enforce the terms of the Agreement is entitled to recover its reasonable attorneys' fees and costs of litigation from the non-prevailing party. GAP has incurred and continues to incur substantial attorneys' fees and costs in connection with its efforts to collect the amounts owed by PBGC under the Off-Take Agreement, including (i) pre-litigation demand and collection efforts, (ii) the prosecution of the Cook County Action, and (iii) the preparation and filing of this Proof of Claim in the receivership proceeding.

49. Through January 31, 2023, GAP has incurred the following attorneys' fees and costs through Calderwood & Harkness LLP:

(a) Professional fees for legal services rendered by Calderwood & Harkness LLP attorneys and staff: $287,415.50.

(b) Costs and disbursements, including court filing fees, service of process fees, court reporter fees, legal research charges (Westmark Data Systems), and other out-of-pocket expenses: $14,622.35.

50. A summary of the attorneys' fees and costs incurred by Calderwood & Harkness LLP through January 31, 2023 is attached hereto as Exhibit F and incorporated herein by reference. GAP will make available, upon request by the Receiver or the Court, detailed billing records and time entries supporting the reasonableness and necessity of the fees and costs incurred.

51. Claimant reserves the right to supplement this claim for additional attorneys' fees and costs incurred after January 31, 2023, in connection with the prosecution and administration of GAP's claims in this receivership proceeding and any related proceedings, including but not limited to fees incurred in reviewing and objecting to any proposed plan of distribution.

D. Total Claim Amount

52. Based on the foregoing, GAP's total claim against the receivership estate of Prairie Basin Grain Co. is approximately $5,664,428.85, comprised as follows:

53. Interest continues to accrue at the contractual rate of 1.5% per month (18% per annum) on all unpaid principal amounts. Claimant reserves all rights to update, amend, or supplement this claim for post-petition interest and additional attorneys' fees and costs to the extent permitted by applicable law and the orders of this Court.

V. CLASSIFICATION OF CLAIM

A. Nature of Claim

54. GAP's claim is an unsecured claim arising from PBGC's breach of the Off-Take Agreement dated March 15, 2019. GAP is a trade creditor of PBGC. The claim arises in the ordinary course of GAP's grain origination and commodity trading business, and in the ordinary course of PBGC's grain purchasing and merchandising operations.

55. GAP does not hold any security interest, mortgage, lien, pledge, or other encumbrance on any property or assets of PBGC, and does not claim any secured status for its claim. GAP does not hold any collateral securing its claim against the receivership estate.

B. Priority.

56. GAP acknowledges that the assets of PBGC are subject to a senior perfected security interest held by Heartland Prairie Bank, N.A. ("Heartland Prairie Bank") under that certain Revolving Credit and Term Loan Agreement between PBGC and Heartland Prairie Bank dated as of June 1, 2018 (as amended, restated, or modified from time to time), under which Heartland Prairie Bank provided PBGC with an aggregate financing commitment of $45,000,000.00. Upon information and belief, the outstanding balance under the Heartland Prairie Bank credit facility was approximately $31,400,000.00 as of April 2022. Heartland Prairie Bank holds a perfected first-priority security interest in substantially all of PBGC's personal property and assets, including but not limited to accounts receivable, inventory (including grain inventory), equipment, and general intangibles.

57. GAP's claim is asserted as a general unsecured claim against the receivership estate of PBGC. GAP acknowledges that its claim is subordinate to the secured claims of Heartland Prairie Bank, N.A., and to any administrative expenses and priority claims allowed by this Court in the receivership proceeding. GAP reserves the right to contest the validity, extent, priority, or amount of any other claim asserted against the receivership estate, including but not limited to any claim by Heartland Prairie Bank, to the extent that GAP's interests as a creditor may be affected.

VI. RELATED CLAIMS AND RIGHTS RESERVED

A. Personal Guaranty — Darren K. Musgrave

58. In connection with the execution of the Off-Take Agreement, Darren K. Musgrave, President and sole director of PBGC, executed a limited personal guaranty of PBGC's payment obligations under the Off-Take Agreement (the "Musgrave Guaranty"). The Musgrave Guaranty is set forth as Exhibit D to the Off-Take Agreement. A copy of the Musgrave Guaranty is included as part of Exhibit A attached hereto.

59. Under the Musgrave Guaranty, Mr. Musgrave personally, unconditionally, and irrevocably guaranteed the payment of PBGC's obligations under the Off-Take Agreement, subject to a maximum aggregate liability cap of $2,000,000.00. The Musgrave Guaranty provides that it is a guaranty of payment and not merely of collection, and that GAP may proceed directly against Mr. Musgrave without first exhausting its remedies against PBGC.

60. GAP expressly reserves all rights to pursue the Musgrave Guaranty claim against Darren K. Musgrave individually, which claim is separate from and independent of this Proof of Claim against the receivership estate of PBGC. The Musgrave Guaranty claim was asserted as Count II of the Cook County Action (Case No. 2022-L-004831), and GAP intends to continue its prosecution of that claim against Mr. Musgrave in his individual capacity. Nothing in this Proof of Claim shall be construed as a waiver, release, or modification of any rights or claims held by GAP against Mr. Musgrave under the Musgrave Guaranty or otherwise.

61. To the extent that GAP recovers any amounts from Mr. Musgrave under the Musgrave Guaranty, such amounts shall be credited against the total claim asserted herein to the extent required by applicable law, but only to the extent of any duplicative recovery. GAP reserves the right to pursue full recovery from all available sources until the total amount of its claim has been paid in full.

B. Reservation of Rights

62. Claimant expressly reserves all rights to amend, supplement, or modify this Proof of Claim at any time prior to the final adjudication and allowance of claims in this receivership proceeding. This reservation includes, without limitation, the right to (i) assert additional or continuing contractual interest accruing after December 31, 2022, (ii) assert additional attorneys' fees and costs incurred after January 31, 2023, (iii) assert any claims arising from the Receiver's rejection or disaffirmance of the Off-Take Agreement, and (iv) assert any claims arising from the discovery of additional facts or circumstances relevant to GAP's claims.

63. Claimant reserves the right to object to any proposed plan of distribution, any proposed sale of receivership assets, any application for allowance of administrative expenses, or any other disposition of the receivership estate's assets that may adversely affect GAP's rights or the value of GAP's claim.

64. The filing of this Proof of Claim shall not constitute, and shall not be deemed or construed as, a waiver, release, relinquishment, or modification of any rights, claims, defenses, counterclaims, or setoff rights available to GAP under the Off-Take Agreement, the Musgrave Guaranty, applicable law, or any other agreement or instrument. GAP reserves all such rights in their entirety.

VII. LIST OF EXHIBITS

The following exhibits are attached hereto and incorporated herein by reference as part of this Proof of Claim:

Exhibit A: Master Grain Purchase and Off-Take Agreement dated March 15, 2019, between Greenfield Agricultural Partners LLC and Prairie Basin Grain Co., together with all exhibits, schedules, and amendments thereto, including the Personal Guaranty of Darren K. Musgrave (Exhibit D to the Off-Take Agreement).

Exhibit B: Copies of five unpaid invoices issued by Greenfield Agricultural Partners LLC to Prairie Basin Grain Co.: Invoice No. GAP-2021-3187 (dated September 28, 2021, $892,500.00); Invoice No. GAP-2021-3244 (dated October 15, 2021, $936,750.00); Invoice No. GAP-2021-3301 (dated November 12, 2021, $1,224,000.00); Invoice No. GAP-2021-3358 (dated December 8, 2021, $741,600.00); and Invoice No. GAP-2022-0042 (dated January 19, 2022, $1,075,200.00), together with corresponding scale tickets and grain inspection certificates.

Exhibit C: Pre-litigation demand and forbearance correspondence, including (i) demand letter dated January 25, 2022 from Caleb Jennings, Director of Grain Operations, Greenfield Agricultural Partners LLC, to Darren K. Musgrave, President, Prairie Basin Grain Co.; (ii) email response dated February 3, 2022 from Darren K. Musgrave to Caleb Jennings; and (iii) conditional forbearance letter dated February 14, 2022 from Greenfield Agricultural Partners LLC to Prairie Basin Grain Co.

Exhibit D: Pre-suit demand letter dated April 11, 2022, from Francesca Morano, Calderwood & Harkness LLP, to Prairie Basin Grain Co. and Darren K. Musgrave.

Exhibit E: Interest calculation spreadsheet setting forth the computation of accrued interest at the contractual rate of 1.5% per month (18% per annum) on each unpaid invoice from its respective due date through December 31, 2022 (total accrued interest: approximately $492,341.00).

Exhibit F: Summary of attorneys' fees and costs incurred by Calderwood & Harkness LLP through January 31, 2023, in connection with the representation of Greenfield Agricultural Partners LLC in the Cook County Action and the receivership proceeding ($287,415.50 in professional fees; $14,622.35 in costs and disbursements; total $302,037.85).

VIII. VERIFICATION / DECLARATION UNDER PENALTY OF PERJURY

I, Francesca Morano, as attorney of record for Greenfield Agricultural Partners LLC, the Claimant herein, do hereby declare under penalty of perjury under the laws of the State of Illinois that the foregoing Proof of Claim, together with all exhibits attached hereto, is true and correct to the best of my knowledge, information, and belief, formed after reasonable inquiry and based upon the books, records, and files of Greenfield Agricultural Partners LLC and of Calderwood & Harkness LLP. I am authorized to execute this verification on behalf of the Claimant and have personal knowledge of the facts set forth herein or have obtained such information from persons with personal knowledge of such facts.

Executed on January 30, 2023, in Chicago, Illinois.

________________________________________

Francesca Morano Partner, Calderwood & Harkness LLP Attorney for Claimant Greenfield Agricultural Partners LLC

IX. SIGNATURE BLOCK

Respectfully submitted,

GREENFIELD AGRICULTURAL PARTNERS LLC

By its attorneys,

CALDERWOOD & HARKNESS LLP

By: ________

Francesca Morano (ARDC No. 6321584) Calderwood & Harkness LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-9400 Facsimile: (312) 555-9401

Email: fmorano@calderwoodharkness.com

Hannah Brinkley (ARDC No. 6348721) Calderwood & Harkness LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-9415 Facsimile: (312) 555-9401

Email: hbrinkley@calderwoodharkness.com

Attorneys for Claimant Greenfield Agricultural Partners LLC

Dated: January 30, 2023

X. CERTIFICATE OF SERVICE

I, Francesca Morano, an attorney, hereby certify that on January 30, 2023, I caused a true and correct copy of the foregoing Proof of Claim of Greenfield Agricultural Partners LLC, together with all exhibits attached thereto (Exhibits A through F), to be served upon the following persons by the methods indicated:

Gareth J. Whitmore, Receiver Whitmore Strauss Advisory LLC 500 East Monroe Street, Suite 300 Springfield, Illinois 62701

Via hand delivery and electronic mail (gwhitmore@whitmorestrauss.com)

Joanna M. Lockridge Lockridge Payne LLP 120 South Sixth Street, Suite 1800 Springfield, Illinois 62701

Via U.S. First Class Mail, postage prepaid, and electronic mail (jlockridge@lockridgepayne.com)

________________________________________

Francesca Morano Calderwood & Harkness LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606

Dated: January 30, 2023

Invoice No.	Date Issued	Commodity	Bushels	Price/Bu	Amount	Due Date
GAP-2021-3187	09/28/2021	#2 Yellow Corn	150,000	$5.95	$892,500.00	10/28/2021
GAP-2021-3244	10/15/2021	#1 Yellow Soybeans	75,000	$12.49	$936,750.00	11/14/2021
GAP-2021-3301	11/12/2021	#2 Yellow Corn	200,000	$6.12	$1,224,000.00	12/12/2021
GAP-2021-3358	12/08/2021	#2 Yellow Corn	120,000	$6.18	$741,600.00	01/07/2022
GAP-2022-0042	01/19/2022	#1 Yellow Soybeans	80,000	$13.44	$1,075,200.00	02/18/2022
Invoice No.	Amount
GAP-2021-3187	$892,500.00
GAP-2021-3244	$936,750.00
GAP-2021-3301	$1,224,000.00
GAP-2021-3358	$741,600.00
GAP-2022-0042	$1,075,200.00
Total Principal	$4,870,050.00
Component	Amount
Unpaid principal (five invoices)	$4,870,050.00
Accrued interest (through 12/31/2022)	$492,341.00
Attorneys' fees and costs (through 1/31/2023)	$302,037.85
TOTAL CLAIM	$5,664,428.85

IN THE CIRCUIT COURT OF SANGAMON COUNTY, ILLINOIS
In the Matter of the Receivership of
PRAIRIE BASIN GRAIN CO., an Illinois corporation.
Case No. 2022-CH-001247
PROOF OF CLAIM OF GREENFIELD AGRICULTURAL PARTNERS LLC
Filed: January 30, 2023
Greenfield Agricultural Partners LLC ("GAP" or "Claimant"), by and through its undersigned attorneys, Calderwood & Harkness LLP, hereby submits this Proof of Claim against the receivership estate of Prairie Basin Grain Co. ("PBGC" or the "Debtor") and, in support thereof, states and avers as follows:
I. IDENTIFICATION OF CLAIMANT
A. Claimant Information
1. The Claimant is Greenfield Agricultural Partners LLC, a limited liability company duly organized and existing under the laws of the State of Delaware.
2. GAP's principal place of business is located at 1400 Grand Prairie Boulevard, Suite 800, Des Moines, Iowa 50309.
3. GAP's Federal Employer Identification Number ("FEIN") is 47-3821654.
4. GAP is a strategic private company engaged in large-scale grain origination, commodity trading, agricultural chemicals, and crop input supply across the Midwest. GAP operates grain origination facilities and trading operations in Iowa, Illinois, Indiana, Nebraska, and Minnesota, and maintains long-standing commercial relationships with grain elevators, cooperatives, and agricultural processors throughout the region.
5. GAP's authorized representative for purposes of this Proof of Claim is Thomas R. Greenfield, Chairman and Chief Executive Officer.
B. Claimant's Counsel
6. GAP is represented in this matter by the law firm of Calderwood & Harkness LLP, located at 225 West Wacker Drive, Suite 4000, Chicago, Illinois 60606. The lead attorney responsible for this matter is Francesca Morano, Partner. Additional counsel assisting with this matter is Hannah Brinkley, Lead Associate. Counsel may be reached at (312) 555-9400 (telephone) and (312) 555-9401 (facsimile). This matter is identified internally as C&H Matter No.: 1020-00005.
7. All correspondence, notices, pleadings, orders, and other communications relating to this Proof of Claim or the receivership proceeding should be directed to Calderwood & Harkness LLP at the address set forth above, to the attention of Francesca Morano and Hannah Brinkley. Electronic mail communications may be directed to fmorano@calderwoodharkness.com and hbrinkley@calderwoodharkness.com.
II. IDENTIFICATION OF DEBTOR / ENTITY IN RECEIVERSHIP
8. The entity in receivership against which this Proof of Claim is asserted is Prairie Basin Grain Co., an Illinois corporation, with its principal office located at 4520 Harvest Road, Champaign, Illinois 61820. PBGC's Federal Employer Identification Number is 37-4295018.
9. PBGC is a grain elevator operator and commodity merchandiser that, prior to the commencement of the receivership, operated grain storage, handling, and merchandising facilities in Champaign, Macon, and Piatt Counties, Illinois. PBGC purchased grain from producers and commercial counterparties, including GAP, for resale to processors, exporters, and end-users.
10. On December 12, 2022, this Court entered an Order Appointing Receiver (the "Receivership Order"), placing PBGC into receivership and appointing Gareth J. Whitmore, CPA, CIRA, of Whitmore Strauss Advisory LLC, as Receiver. Mr. Whitmore's office is located at 500 East Monroe Street, Suite 300, Springfield, Illinois 62701. The Receivership Order imposed an automatic stay of all pending and future actions against PBGC and its assets.
11. The Receiver is represented by Joanna M. Lockridge of the firm Lockridge Payne LLP, located at 120 South Sixth Street, Suite 1800, Springfield, Illinois 62701.
12. The Receivership Order, among other things, directed the Receiver to marshal and administer the assets of PBGC, to identify, adjudicate, and prioritize claims against the estate, and to establish a process for creditors to file proofs of claim. This Proof of Claim is filed in accordance with the procedures established by the Receiver and in compliance with the deadlines set forth in the Receivership Order and subsequent notices issued by the Receiver.
III. BASIS OF CLAIM
A. The Master Grain Purchase and Off-Take Agreement
13. On or about March 15, 2019, GAP (as Seller) and PBGC (as Buyer) entered into that certain Master Grain Purchase and Off-Take Agreement (the "Off-Take Agreement"), a comprehensive commercial contract governing the purchase and sale of grain commodities between the parties. A true and correct copy of the Off-Take Agreement, together with all exhibits, schedules, and amendments thereto, is attached hereto as Exhibit A and incorporated herein by reference.
14. The Off-Take Agreement has a five-year term, commencing on March 15, 2019 and expiring on March 14, 2024, unless earlier terminated in accordance with its terms. The Off-Take Agreement was negotiated at arm's length by the parties and their respective legal counsel, and was executed by authorized representatives of both GAP and PBGC.
15. Under the Off-Take Agreement, PBGC agreed to purchase specified quantities of #2 Yellow Corn and #1 Yellow Soybeans from GAP on a forward-contract basis, with delivery to be made to PBGC's elevator facilities located in Champaign, Macon, and Piatt Counties, Illinois (the "Delivery Points"). The Off-Take Agreement established minimum volume commitments, requiring PBGC to purchase no fewer than 1,200,000 bushels of #2 Yellow Corn per contract year and no fewer than 600,000 bushels of #1 Yellow Soybeans per contract year from GAP. These minimum volume commitments were a material inducement for GAP's entry into the Off-Take Agreement and were essential to GAP's grain origination planning, hedging strategy, and logistics operations.
16. The pricing mechanism under the Off-Take Agreement was based upon the Chicago Board of Trade ("CBOT") nearby futures price at the time of delivery, plus or minus a negotiated quarterly basis differential as set forth in Exhibit B to the Off-Take Agreement. The basis differential was renegotiated between the parties on a quarterly basis and reflected the local market conditions, transportation costs, and handling charges applicable to the Delivery Points. This pricing structure is standard and customary in the Midwest grain trade.
17. Section 6.1 of the Off-Take Agreement provided that payment for all grain delivered and accepted by PBGC was due and payable net thirty (30) days from the date of delivery and acceptance at the applicable elevator facility. Each delivery was evidenced by a scale ticket, a grain inspection certificate, and a corresponding invoice issued by GAP.
18. Section 7.3 of the Off-Take Agreement provided that any amounts not paid when due would bear interest at the rate of one and one-half percent (1.5%) per month, which is equivalent to eighteen percent (18%) per annum, compounded monthly, calculated from the date such payment was due until the date of actual payment. This late payment interest provision was a bargained-for element of the parties' agreement and was intended to compensate GAP for the costs and risks associated with extended payment delinquencies.
19. Section 12.4 of the Off-Take Agreement provides that in any action or proceeding to enforce the terms of the Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs of litigation from the non-prevailing party. This provision applies to all disputes arising out of or in connection with the Off-Take Agreement, including but not limited to claims for breach of contract and actions to collect amounts owed thereunder.
20. Section 13.9 of the Off-Take Agreement provides that the Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict of laws principles.
B. PBGC's Breach — Failure to Pay
21. From the third quarter of 2021 through the first quarter of 2022, GAP delivered grain to PBGC pursuant to the terms of the Off-Take Agreement. PBGC accepted delivery of all such grain at its elevator facilities, as evidenced by signed scale tickets, weight certificates, and grain grading certificates issued at the time of delivery. At no time did PBGC reject any delivery or raise any dispute regarding the quality, grade, weight, or condition of the grain delivered by GAP.
22. In connection with such deliveries, GAP issued five invoices to PBGC, each of which became due and payable in accordance with Section 6.1 of the Off-Take Agreement (net 30 days from delivery and acceptance). Despite due demand, PBGC failed to pay any of the five invoices, each of which remains outstanding and unpaid in full as of the date of this Proof of Claim. The five unpaid invoices are detailed in the table below:
23. The aggregate unpaid principal amount of the five invoices is $4,870,050.00. True and correct copies of all five invoices, together with the corresponding scale tickets and grain inspection certificates confirming delivery and acceptance, are attached hereto as Exhibit B and incorporated herein by reference.
24. Each of the foregoing invoices was transmitted to PBGC in the ordinary course of business, consistent with the invoicing practices established between the parties throughout the term of the Off-Take Agreement. PBGC never disputed the validity, accuracy, or amount of any of the five invoices.
C. Pre-Litigation Demand and Forbearance Efforts
25. Prior to retaining litigation counsel, GAP made repeated efforts to collect the amounts owed by PBGC and to resolve the payment dispute through commercial negotiations. The relevant chronology of events is as follows:
26. On January 25, 2022, Caleb Jennings, GAP's Director of Grain Operations, sent a formal written demand letter to Darren K. Musgrave, President of PBGC, demanding immediate payment of the three invoices that were then outstanding and past due — namely, Invoice GAP-2021-3187 ($892,500.00), Invoice GAP-2021-3244 ($936,750.00), and Invoice GAP-2021-3301 ($1,224,000.00) — in the aggregate amount of $3,053,250.00. The demand letter set forth the specific invoices, the amounts due, and the applicable late payment interest, and advised PBGC that failure to remit payment would result in a suspension of further deliveries and the commencement of legal proceedings.
27. On February 3, 2022, Darren K. Musgrave responded to Mr. Jennings' demand via electronic mail. In his email, Mr. Musgrave acknowledged the existence and amount of the outstanding debt owed to GAP and did not dispute the validity of any of the three invoices referenced in the demand letter. Mr. Musgrave stated that PBGC was experiencing temporary cash flow difficulties and was actively negotiating additional financing with Heartland Prairie Bank, N.A. ("Heartland Prairie Bank"), its senior secured lender. Mr. Musgrave requested a ninety (90)-day forbearance period to allow PBGC time to secure the necessary financing to satisfy its obligations to GAP.
28. In a good-faith effort to preserve the commercial relationship between the parties and to allow PBGC a reasonable opportunity to cure its payment defaults, GAP agreed, by letter dated February 14, 2022, to a limited sixty (60)-day forbearance period. GAP's agreement to forbear was expressly conditioned upon PBGC making an interim payment of Invoice GAP-2021-3187, in the amount of $892,500.00, on or before March 1, 2022, as a demonstration of good faith and financial capacity. The forbearance letter further stated that GAP's agreement to forbear was without prejudice to any of GAP's rights and remedies under the Off-Take Agreement or applicable law, and that the forbearance would terminate immediately upon PBGC's failure to make the required interim payment.
29. On March 1, 2022, the deadline for PBGC's required interim payment passed without PBGC making any payment whatsoever to GAP. PBGC failed to tender the $892,500.00 payment required under the conditional forbearance agreement, and did not communicate any explanation or request for further accommodation.
30. In light of PBGC's failure to satisfy the condition of the forbearance and its continued failure to pay any of the outstanding invoices, on March 8, 2022, GAP exercised its rights under Section 8.2 of the Off-Take Agreement (Adequate Assurance of Performance) and suspended all further deliveries of grain to PBGC. Section 8.2 provides, in relevant part, that where reasonable grounds for insecurity arise with respect to the performance of either party, the other party may in writing demand adequate assurance of due performance and, if commercially reasonable, suspend any performance for which it has not already received the agreed return. GAP's suspension of deliveries was commercially reasonable and justified under the circumstances, given PBGC's extended and worsening pattern of non-payment.
31. Copies of the January 25, 2022 demand letter from Caleb Jennings, the February 3, 2022 email response from Darren K. Musgrave, and the February 14, 2022 conditional forbearance letter from GAP are attached hereto as Exhibit C and incorporated herein by reference.
D. Pre-Suit Demand by Counsel
32. On April 11, 2022, Francesca Morano of Calderwood & Harkness LLP, acting on behalf of GAP, transmitted a formal pre-suit demand letter (the "Pre-Suit Demand") to Prairie Basin Grain Co. at its principal office and to Darren K. Musgrave individually at his residential address. The Pre-Suit Demand set forth in detail GAP's claims arising from PBGC's breach of the Off-Take Agreement, identified all five outstanding invoices (including the two additional invoices — GAP-2021-3358 and GAP-2022-0042 — that had come due since the prior demand), and demanded payment of the aggregate principal sum of $4,870,050.00, together with all accrued interest at the contractual rate, within fifteen (15) business days of receipt.
33. The Pre-Suit Demand further advised PBGC and Mr. Musgrave that, in the event of their failure to remit full payment within the specified period, GAP would commence litigation against both PBGC and Mr. Musgrave to recover all amounts owed, together with contractual interest, attorneys' fees, and costs.
34. The fifteen (15) business day demand period expired on or about May 2, 2022. PBGC and Mr. Musgrave failed to make any payment, and neither PBGC nor Mr. Musgrave responded to the Pre-Suit Demand in any manner.
35. A true and correct copy of the April 11, 2022 Pre-Suit Demand letter is attached hereto as Exhibit D and incorporated herein by reference.
E. Related Litigation
36. On May 9, 2022, having exhausted all pre-litigation collection efforts, GAP filed a four-count verified complaint (the "Complaint") against Prairie Basin Grain Co. and Darren K. Musgrave individually in the Circuit Court of Cook County, Illinois, County Department, Law Division, captioned Greenfield Agricultural Partners LLC v. Prairie Basin Grain Co. and Darren K. Musgrave, Case No. 2022-L-004831 (the "Cook County Action"). The four counts of the Complaint are as follows:
Count I — Breach of Contract (Off-Take Agreement) against PBGC: GAP alleged that PBGC breached the Off-Take Agreement by failing to pay the five invoices described herein, in the aggregate amount of $4,870,050.00, together with contractual interest, attorneys' fees, and costs.
Count II — Breach of Personal Guaranty against Darren K. Musgrave: GAP alleged that Mr. Musgrave breached his personal guaranty of PBGC's payment obligations under the Off-Take Agreement. As described more fully in Section VI.A below, the Musgrave Guaranty is capped at $2,000,000.00.
Count III — Account Stated against PBGC: GAP alleged that the five invoices constituted an account stated between the parties, inasmuch as PBGC received and retained the invoices without objection and, through Mr. Musgrave's February 3, 2022 email, expressly acknowledged the existence and amount of the underlying indebtedness.
Count IV — Unjust Enrichment (alternative) against PBGC: GAP alleged, in the alternative, that PBGC was unjustly enriched by its receipt and retention of 625,000 bushels of grain delivered by GAP, for which PBGC failed to pay.
37. Service of process on both PBGC and Darren K. Musgrave was completed on May 24, 2022, through a licensed process server in accordance with the Illinois Code of Civil Procedure.
38. On June 27, 2022, PBGC, through its then-counsel, Bartlett, Reyes Linley CPAs LLP & Harkin LLP (Douglas M. Harkin, lead counsel), filed its Answer and Affirmative Defenses to the Complaint. Among the affirmative defenses asserted by PBGC were force majeure and commercial impracticability, which PBGC contended excused its failure to pay due to alleged supply chain disruptions and unprecedented commodity price volatility.
39. On August 22, 2022, the Honorable Patricia Delacroix, presiding judge in the Cook County Action, granted GAP's Motion to Strike PBGC's force majeure and commercial impracticability affirmative defenses, finding that the Off-Take Agreement's force majeure clause did not encompass the conditions cited by PBGC and that PBGC's payment obligation — as distinguished from its performance of delivery or receipt obligations — was not subject to discharge on the basis of commercial impracticability. This ruling eliminated the only substantive defenses asserted by PBGC.
40. On November 4, 2022, Bartlett, Reyes Linley CPAs LLP & Harkin LLP filed a Motion to Withdraw as counsel for both PBGC and Darren K. Musgrave in the Cook County Action, citing non-payment of legal fees by PBGC and Mr. Musgrave. The Court granted the Motion to Withdraw on November 18, 2022. As of that date, neither PBGC nor Mr. Musgrave had retained substitute counsel in the Cook County Action.
41. On December 19, 2022, GAP, through Calderwood & Harkness LLP, received formal notice of the Receivership Order and automatic stay entered by this Court on December 12, 2022. Upon receipt of such notice, GAP ceased all collection and litigation activity against PBGC in the Cook County Action in compliance with the automatic stay.
42. The Cook County Action is currently stayed with respect to PBGC by operation of the Receivership Order. GAP intends, in due course and at the appropriate time, to file a notice of voluntary dismissal without prejudice of the claims asserted against PBGC in the Cook County Action, while preserving and continuing to pursue its claims against Darren K. Musgrave individually, which claims are not subject to the automatic stay.
IV. AMOUNT OF CLAIM
A. Principal.
43. The total unpaid principal amount owed by PBGC to GAP under the Off-Take Agreement, representing the aggregate amount of the five outstanding and unpaid invoices described in Section III.B above, is $4,870,050.00, comprised as follows:
44. No partial payments have been received by GAP from PBGC, the Receiver, or any other party on account of any of the foregoing invoices. No credits, offsets, deductions, or allowances are applicable to any of the invoices, and none have been claimed by PBGC.
B. Accrued Interest
45. Pursuant to Section 7.3 of the Off-Take Agreement, all amounts not paid when due bear interest at the rate of one and one-half percent (1.5%) per month, which is equivalent to eighteen percent (18%) per annum. Interest is calculated on each invoice from its respective due date through December 31, 2022, the date selected by GAP for purposes of calculating interest in this Proof of Claim. The interest calculation for each invoice is summarized below:
(a) Invoice GAP-2021-3187 (Due Date: October 28, 2021): Interest accruing from October 28, 2021 through December 31, 2022, a period of approximately 14.1 months, on a principal amount of $892,500.00.
(b) Invoice GAP-2021-3244 (Due Date: November 14, 2021): Interest accruing from November 14, 2021 through December 31, 2022, a period of approximately 13.6 months, on a principal amount of $936,750.00.
(c) Invoice GAP-2021-3301 (Due Date: December 12, 2021): Interest accruing from December 12, 2021 through December 31, 2022, a period of approximately 12.6 months, on a principal amount of $1,224,000.00.
(d) Invoice GAP-2021-3358 (Due Date: January 7, 2022): Interest accruing from January 7, 2022 through December 31, 2022, a period of approximately 11.8 months, on a principal amount of $741,600.00.
(e) Invoice GAP-2022-0042 (Due Date: February 18, 2022): Interest accruing from February 18, 2022 through December 31, 2022, a period of approximately 10.4 months, on a principal amount of $1,075,200.00.
46. The total accrued interest through December 31, 2022 is approximately $492,341.00. A detailed interest calculation spreadsheet, setting forth the computation of interest on each invoice on a monthly basis at the contractual rate, is attached hereto as Exhibit E and incorporated herein by reference.
47. Claimant expressly reserves the right to assert additional interest accruing after December 31, 2022, at the contractual rate of 1.5% per month (18% per annum), to the extent permitted by applicable law and by any order of this Court governing the allowance and priority of claims in this receivership proceeding. Interest on the unpaid principal continues to accrue on a daily basis.
C. Attorneys' Fees and Costs
48. Pursuant to Section 12.4 of the Off-Take Agreement, the prevailing party in any action or proceeding to enforce the terms of the Agreement is entitled to recover its reasonable attorneys' fees and costs of litigation from the non-prevailing party. GAP has incurred and continues to incur substantial attorneys' fees and costs in connection with its efforts to collect the amounts owed by PBGC under the Off-Take Agreement, including (i) pre-litigation demand and collection efforts, (ii) the prosecution of the Cook County Action, and (iii) the preparation and filing of this Proof of Claim in the receivership proceeding.
49. Through January 31, 2023, GAP has incurred the following attorneys' fees and costs through Calderwood & Harkness LLP:
(a) Professional fees for legal services rendered by Calderwood & Harkness LLP attorneys and staff: $287,415.50.
(b) Costs and disbursements, including court filing fees, service of process fees, court reporter fees, legal research charges (Westmark Data Systems), and other out-of-pocket expenses: $14,622.35.
(c) Total attorneys' fees and costs: $302,037.85.
50. A summary of the attorneys' fees and costs incurred by Calderwood & Harkness LLP through January 31, 2023 is attached hereto as Exhibit F and incorporated herein by reference. GAP will make available, upon request by the Receiver or the Court, detailed billing records and time entries supporting the reasonableness and necessity of the fees and costs incurred.
51. Claimant reserves the right to supplement this claim for additional attorneys' fees and costs incurred after January 31, 2023, in connection with the prosecution and administration of GAP's claims in this receivership proceeding and any related proceedings, including but not limited to fees incurred in reviewing and objecting to any proposed plan of distribution.
D. Total Claim Amount
52. Based on the foregoing, GAP's total claim against the receivership estate of Prairie Basin Grain Co. is approximately $5,664,428.85, comprised as follows:
53. Interest continues to accrue at the contractual rate of 1.5% per month (18% per annum) on all unpaid principal amounts. Claimant reserves all rights to update, amend, or supplement this claim for post-petition interest and additional attorneys' fees and costs to the extent permitted by applicable law and the orders of this Court.
V. CLASSIFICATION OF CLAIM
A. Nature of Claim
54. GAP's claim is an unsecured claim arising from PBGC's breach of the Off-Take Agreement dated March 15, 2019. GAP is a trade creditor of PBGC. The claim arises in the ordinary course of GAP's grain origination and commodity trading business, and in the ordinary course of PBGC's grain purchasing and merchandising operations.
55. GAP does not hold any security interest, mortgage, lien, pledge, or other encumbrance on any property or assets of PBGC, and does not claim any secured status for its claim. GAP does not hold any collateral securing its claim against the receivership estate.
B. Priority.
56. GAP acknowledges that the assets of PBGC are subject to a senior perfected security interest held by Heartland Prairie Bank, N.A. ("Heartland Prairie Bank") under that certain Revolving Credit and Term Loan Agreement between PBGC and Heartland Prairie Bank dated as of June 1, 2018 (as amended, restated, or modified from time to time), under which Heartland Prairie Bank provided PBGC with an aggregate financing commitment of $45,000,000.00. Upon information and belief, the outstanding balance under the Heartland Prairie Bank credit facility was approximately $31,400,000.00 as of April 2022. Heartland Prairie Bank holds a perfected first-priority security interest in substantially all of PBGC's personal property and assets, including but not limited to accounts receivable, inventory (including grain inventory), equipment, and general intangibles.
57. GAP's claim is asserted as a general unsecured claim against the receivership estate of PBGC. GAP acknowledges that its claim is subordinate to the secured claims of Heartland Prairie Bank, N.A., and to any administrative expenses and priority claims allowed by this Court in the receivership proceeding. GAP reserves the right to contest the validity, extent, priority, or amount of any other claim asserted against the receivership estate, including but not limited to any claim by Heartland Prairie Bank, to the extent that GAP's interests as a creditor may be affected.
VI. RELATED CLAIMS AND RIGHTS RESERVED
A. Personal Guaranty — Darren K. Musgrave
58. In connection with the execution of the Off-Take Agreement, Darren K. Musgrave, President and sole director of PBGC, executed a limited personal guaranty of PBGC's payment obligations under the Off-Take Agreement (the "Musgrave Guaranty"). The Musgrave Guaranty is set forth as Exhibit D to the Off-Take Agreement. A copy of the Musgrave Guaranty is included as part of Exhibit A attached hereto.
59. Under the Musgrave Guaranty, Mr. Musgrave personally, unconditionally, and irrevocably guaranteed the payment of PBGC's obligations under the Off-Take Agreement, subject to a maximum aggregate liability cap of $2,000,000.00. The Musgrave Guaranty provides that it is a guaranty of payment and not merely of collection, and that GAP may proceed directly against Mr. Musgrave without first exhausting its remedies against PBGC.
60. GAP expressly reserves all rights to pursue the Musgrave Guaranty claim against Darren K. Musgrave individually, which claim is separate from and independent of this Proof of Claim against the receivership estate of PBGC. The Musgrave Guaranty claim was asserted as Count II of the Cook County Action (Case No. 2022-L-004831), and GAP intends to continue its prosecution of that claim against Mr. Musgrave in his individual capacity. Nothing in this Proof of Claim shall be construed as a waiver, release, or modification of any rights or claims held by GAP against Mr. Musgrave under the Musgrave Guaranty or otherwise.
61. To the extent that GAP recovers any amounts from Mr. Musgrave under the Musgrave Guaranty, such amounts shall be credited against the total claim asserted herein to the extent required by applicable law, but only to the extent of any duplicative recovery. GAP reserves the right to pursue full recovery from all available sources until the total amount of its claim has been paid in full.
B. Reservation of Rights
62. Claimant expressly reserves all rights to amend, supplement, or modify this Proof of Claim at any time prior to the final adjudication and allowance of claims in this receivership proceeding. This reservation includes, without limitation, the right to (i) assert additional or continuing contractual interest accruing after December 31, 2022, (ii) assert additional attorneys' fees and costs incurred after January 31, 2023, (iii) assert any claims arising from the Receiver's rejection or disaffirmance of the Off-Take Agreement, and (iv) assert any claims arising from the discovery of additional facts or circumstances relevant to GAP's claims.
63. Claimant reserves the right to object to any proposed plan of distribution, any proposed sale of receivership assets, any application for allowance of administrative expenses, or any other disposition of the receivership estate's assets that may adversely affect GAP's rights or the value of GAP's claim.
64. The filing of this Proof of Claim shall not constitute, and shall not be deemed or construed as, a waiver, release, relinquishment, or modification of any rights, claims, defenses, counterclaims, or setoff rights available to GAP under the Off-Take Agreement, the Musgrave Guaranty, applicable law, or any other agreement or instrument. GAP reserves all such rights in their entirety.
VII. LIST OF EXHIBITS
The following exhibits are attached hereto and incorporated herein by reference as part of this Proof of Claim:
Exhibit A: Master Grain Purchase and Off-Take Agreement dated March 15, 2019, between Greenfield Agricultural Partners LLC and Prairie Basin Grain Co., together with all exhibits, schedules, and amendments thereto, including the Personal Guaranty of Darren K. Musgrave (Exhibit D to the Off-Take Agreement).
Exhibit B: Copies of five unpaid invoices issued by Greenfield Agricultural Partners LLC to Prairie Basin Grain Co.: Invoice No. GAP-2021-3187 (dated September 28, 2021, $892,500.00); Invoice No. GAP-2021-3244 (dated October 15, 2021, $936,750.00); Invoice No. GAP-2021-3301 (dated November 12, 2021, $1,224,000.00); Invoice No. GAP-2021-3358 (dated December 8, 2021, $741,600.00); and Invoice No. GAP-2022-0042 (dated January 19, 2022, $1,075,200.00), together with corresponding scale tickets and grain inspection certificates.
Exhibit C: Pre-litigation demand and forbearance correspondence, including (i) demand letter dated January 25, 2022 from Caleb Jennings, Director of Grain Operations, Greenfield Agricultural Partners LLC, to Darren K. Musgrave, President, Prairie Basin Grain Co.; (ii) email response dated February 3, 2022 from Darren K. Musgrave to Caleb Jennings; and (iii) conditional forbearance letter dated February 14, 2022 from Greenfield Agricultural Partners LLC to Prairie Basin Grain Co.
Exhibit D: Pre-suit demand letter dated April 11, 2022, from Francesca Morano, Calderwood & Harkness LLP, to Prairie Basin Grain Co. and Darren K. Musgrave.
Exhibit E: Interest calculation spreadsheet setting forth the computation of accrued interest at the contractual rate of 1.5% per month (18% per annum) on each unpaid invoice from its respective due date through December 31, 2022 (total accrued interest: approximately $492,341.00).
Exhibit F: Summary of attorneys' fees and costs incurred by Calderwood & Harkness LLP through January 31, 2023, in connection with the representation of Greenfield Agricultural Partners LLC in the Cook County Action and the receivership proceeding ($287,415.50 in professional fees; $14,622.35 in costs and disbursements; total $302,037.85).
VIII. VERIFICATION / DECLARATION UNDER PENALTY OF PERJURY
I, Francesca Morano, as attorney of record for Greenfield Agricultural Partners LLC, the Claimant herein, do hereby declare under penalty of perjury under the laws of the State of Illinois that the foregoing Proof of Claim, together with all exhibits attached hereto, is true and correct to the best of my knowledge, information, and belief, formed after reasonable inquiry and based upon the books, records, and files of Greenfield Agricultural Partners LLC and of Calderwood & Harkness LLP. I am authorized to execute this verification on behalf of the Claimant and have personal knowledge of the facts set forth herein or have obtained such information from persons with personal knowledge of such facts.
Executed on January 30, 2023, in Chicago, Illinois.
________________________________________
Francesca Morano Partner, Calderwood & Harkness LLP Attorney for Claimant Greenfield Agricultural Partners LLC
IX. SIGNATURE BLOCK
Respectfully submitted,
GREENFIELD AGRICULTURAL PARTNERS LLC
By its attorneys,
CALDERWOOD & HARKNESS LLP
By: ________
Francesca Morano (ARDC No. 6321584) Calderwood & Harkness LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-9400 Facsimile: (312) 555-9401
Email: fmorano@calderwoodharkness.com
Hannah Brinkley (ARDC No. 6348721) Calderwood & Harkness LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606 Telephone: (312) 555-9415 Facsimile: (312) 555-9401
Email: hbrinkley@calderwoodharkness.com
Attorneys for Claimant Greenfield Agricultural Partners LLC
Dated: January 30, 2023
X. CERTIFICATE OF SERVICE
I, Francesca Morano, an attorney, hereby certify that on January 30, 2023, I caused a true and correct copy of the foregoing Proof of Claim of Greenfield Agricultural Partners LLC, together with all exhibits attached thereto (Exhibits A through F), to be served upon the following persons by the methods indicated:
Gareth J. Whitmore, Receiver Whitmore Strauss Advisory LLC 500 East Monroe Street, Suite 300 Springfield, Illinois 62701
Via hand delivery and electronic mail (gwhitmore@whitmorestrauss.com)
Joanna M. Lockridge Lockridge Payne LLP 120 South Sixth Street, Suite 1800 Springfield, Illinois 62701
Via U.S. First Class Mail, postage prepaid, and electronic mail (jlockridge@lockridgepayne.com)
________________________________________
Francesca Morano Calderwood & Harkness LLP 225 West Wacker Drive, Suite 4000 Chicago, Illinois 60606
Dated: January 30, 2023
Invoice No. | Date Issued | Commodity | Bushels | Price/Bu | Amount | Due Date
GAP-2021-3187 | 09/28/2021 | #2 Yellow Corn | 150,000 | $5.95 | $892,500.00 | 10/28/2021
GAP-2021-3244 | 10/15/2021 | #1 Yellow Soybeans | 75,000 | $12.49 | $936,750.00 | 11/14/2021
GAP-2021-3301 | 11/12/2021 | #2 Yellow Corn | 200,000 | $6.12 | $1,224,000.00 | 12/12/2021
GAP-2021-3358 | 12/08/2021 | #2 Yellow Corn | 120,000 | $6.18 | $741,600.00 | 01/07/2022
GAP-2022-0042 | 01/19/2022 | #1 Yellow Soybeans | 80,000 | $13.44 | $1,075,200.00 | 02/18/2022
Invoice No. | Amount
GAP-2021-3187 | $892,500.00
GAP-2021-3244 | $936,750.00
GAP-2021-3301 | $1,224,000.00
GAP-2021-3358 | $741,600.00
GAP-2022-0042 | $1,075,200.00
Total Principal | $4,870,050.00
Component | Amount
Unpaid principal (five invoices) | $4,870,050.00
Accrued interest (through 12/31/2022) | $492,341.00
Attorneys' fees and costs (through 1/31/2023) | $302,037.85
TOTAL CLAIM | $5,664,428.85

IN THE CIRCUIT COURT OF SANGAMON COUNTY, ILLINOIS

PROOF OF CLAIM OF GREENFIELD AGRICULTURAL PARTNERS LLC

I. IDENTIFICATION OF CLAIMANT

II. IDENTIFICATION OF DEBTOR / ENTITY IN RECEIVERSHIP

III. BASIS OF CLAIM

IV. AMOUNT OF CLAIM

V. CLASSIFICATION OF CLAIM

VI. RELATED CLAIMS AND RIGHTS RESERVED

VII. LIST OF EXHIBITS

VIII. VERIFICATION / DECLARATION UNDER PENALTY OF PERJURY

IX. SIGNATURE BLOCK

GREENFIELD AGRICULTURAL PARTNERS LLC

CALDERWOOD & HARKNESS LLP

X. CERTIFICATE OF SERVICE

Record

Parties

Dates

Amounts