Agfinity declares bankruptcy | Farmtario

Glacier FarmMedia | MarketsFarm — Agfinity Inc. officially filed for bankruptcy on Nov. 25, just over a month since the Alberta grain brokerage shut down operations and laid off employees.

The company owes $5.067 million to the 181 creditors listed in bankruptcy filings released Nov. 26. Many of the creditors are farmers who sold grain through Agfinity but were never paid. Employees out their last paycheques are also listed in the filing. Listed assets totalled $162,593.

MNP Ltd. has been appointed as the Licensed Insolvency Trustee. Creditors can contact MNP to complete a proof of claim prior to a meeting of creditors scheduled to take place via teleconference on Dec. 16. The meeting is a formality in the bankruptcy process, with the purpose of affirming the trustee’s appointment, appointing inspectors to the bankrupt estate and providing direction to the trustee.

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While Agfinity had once operated as a typical grain broker — matching buyers and sellers through broker notes but never handling any money directly aside from their fee — in recent years the company began using grain purchase contracts where they took the payment from the buyer and paid the seller later. In a July blog post, Agfinity’s president Joseph Billett said the newer contracts were necessary to support cash flow due to narrow margins. However, the company was unable to generate enough trade volumes to match costs.

In a draft letter to be sent to creditors provided by Billett, he acknowledged mistakes made over the past year and offered “sincerest apologies for the pain and stress this situation has caused.”