Court Rejects Bond Companies  09/29 11:32

   Bankruptcy Court: Bond Companies Have No Rights to Hansen-Mueller Grain Funds

   A Nebraska bankruptcy judge ruled that Hansen-Mueller's surety companies 
have no claim to disputed grain proceeds, removing a key Chapter 11 obstacle.

Todd Neeley
DTN Environmental Editor

   LINCOLN, Neb. (DTN) -- Two bonding companies in the Hansen-Mueller Co.'s 
Chapter 11 bankruptcy case lost their battle on about $7.9 million in claims to 
grain proceeds, after a federal bankruptcy court in Nebraska ruled on Monday 
the companies have no rights to the proceeds.

   For Hansen-Mueller's financier BMO Bank, the judge's ruling against Harco 
National Insurance Company and International Fidelity Insurance Company will 
free up about $3.9 million BMO held in a reserve account. BMO loaned more than 
$50 million to the Omaha-based company.

   The bonding companies argued that disputed grain proceeds should be used to 
reimburse bond payments made to farmers, and that the general indemnity 
agreement with Hansen-Mueller created a trust fund for those proceeds.

   During arguments, the surety companies pointed to previous court cases in 
the construction industry that dealt with their issue.

   "As the debtor's counsel aptly stated, the surety is trying to fit a square 
peg into a round hole," U.S. Bankruptcy Judge Thomas L. Saladino said in his 
order.

   "Under the indemnity agreement as written, there are no funds to which the 
surety can claim a legal or equitable interest. Construction contractors bonded 
for specific projects encompass a different scope of risk than bonds mandated 
by state and federal licensing requirements for grain dealers to conduct 
business."

   The bonding issue was the main barrier to Hansen-Mueller moving forward with 
filing a Chapter 11 plan.

   The company has a motion pending before the U.S. Bankruptcy Court of 
Nebraska to extend an already passed exclusivity deadline from September to 
November.

   Extending that deadline would prevent creditors and other parties from 
filing competing bankruptcy plans.

   The bonding companies had argued that they stand in the place of farmers who 
have outstanding claims in the bankruptcy case.

   "As to the grain producers, the debtor argues the surety cannot exercise its 
subrogation rights because the bond amounts paid are less than the amount of 
the claims held by the producers, so the producers will never be paid in full, 
thereby preventing the surety from stepping into their

   shoes to recover from the debtor," Saladino said in the order.

   "Nevertheless, those liability releases and subrogation rights do not 
improve the surety's overall position. The grain producers into whose shoes the 
surety is stepping are unsecured creditors. This court has not awarded any 
producers a right to the grain or its proceeds. In fact,

   previous orders -- which are now final -- found that the producers did not 
retain any interest in the grain or its proceeds."

   Read more on DTN:

   "Hansen-Mueller Seeks Ch. 11 Extension," 
https://www.dtnpf.com/agriculture/web/ag/crops/article/2026/09/11/hansen-mueller
-seeks-2-month-file-11

   "Hansen-Mueller Sureties Face Scrutiny," 
https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2026/09/25
/bmo-bank-unlikely-repaid-full-hansen

   "Neb. Grain Company Files Chapter 11," 
https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2025/11/17
/hansen-mueller-files-chapter-11-owes

   Todd Neeley can be reached at todd.neeley@dtn.com

   Follow him on social platform X @DTNeeley




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