Judge to rule on MCP lawsuit in 90 days

Lawsuit pits MCP shareholders against MCP executives

By KURT NESBITT

Journal Staff Writer

NEW ULM -- A lawsuit stemming from the sale of Minnesota Corn Processors in Marshall to ag giant Archer Daniels Midland is going to keep a local judge busy in the near future.

Now that the teams of attorneys representing both MCP executives and the farmers who sued those officers have made arguments, Brown County District Judge John Rodenberg will have plenty of reading to do before he makes his decision.

Arguments were heard in Brown County District Court on Tuesday.

Rodenberg's decision, which is due in 90 days, could resolve a class-action lawsuit brought on behalf of 5,500 farmers and claims ADM paid millions of dollars to the Marshall, Minn., corn plant's chief executive officer and other executives for a deal that cheated farmers.

Minnesota Corn Products was the second-largest ethanol producer in the U.S., just behind Archer Daniels Midland, before ADM bought MCP. ADM bought the plant for nearly $400 million.

The motion for summary judgment was brought by the attorneys representing former MCP CEO Dan Thompson and the other corporate officers named in the class action suit. By making the motion, the defense team is taking all the testimony and evidence from both sides of the case and is arguing that a reasonable jury looking at the same evidence could only rule in favor of the MCP executives. A trial won't be necessary if Rodenberg agrees with MCP's arguments.

The suit claims that Thompson and other executives acted in their own self-interest when they urged farmers to sell MCP to rival ADM during the summer of 2003. It charges that Thompson set the price with ADM officials in Chicago and got the terms of his employment changed so he would get a $2 million lump sum payment if the sale was approved.

Other MCP executives got agreements that totaled more than $6.5 million, the lawsuit claims, before they started telling farmers MCP's future was looking grim.

Minnesota Corn Products was formed in 1980 and originally produced corn syrup. It owned plants in Marshall and Columbus, Neb., and 17 regional storage, blending and distribution stations. It became a Colorado limited liability corporation in 2000. ADM first acquired a 30 percent non-voting interest in the company for a $120 million investment in 1997, when MCP was on the verge of bankruptcy.

Tuesday's hearing was moved to the eastern end of Minnesota's Fifth Judicial District after two sitting Lyon County district court judges, Leland Bush and George Haralson, removed themselves from the case in August because of prior personal relationships with the people involved in the case.

Teams of attorneys for both sides in the case, several cases of documents parked behind their tables, argued their cases using both their own and each other's evidence. They made lengthy legal arguments according to past court decisions and standards. They repeated those arguments during the rebuttal period that came near the end of the hearing.

At the beginning of the hearing Tuesday afternoon, Patrick Williams, an attorney representing the MCP executives, said that the arguments against the executives don't support the legal standards required by the allegations made in the lawsuit and that there was no "unjust enrichment" for Thompson and the others when MCP was sold to ADM.

Attorney Robert Moilanen, who represents the farmers suing the executives, countered that Thompson breached his responsibility as CEO by making a sale offer without authorization, used a corporate opportunity for himself, failed to disclose information regarding the sale and used an unfair process to negotiate the sale.

Rodenberg now has 10 boxes filled with legal documents to sift through before making a ruling. He noted at the end of Tuesday's hearing that court administrator has set aside a special room just to store the case files.

A trial for the case is scheduled on Feb. 1. Both sides have also been ordered to the mediation table to allow the farmers and the executives to try and find a settlement before the case is argued to a jury.