Chapter 12 for Dairies

Ag attorney Patrick Geile specializes in bankruptcy filings for farmers. We chatted. “It holds the collectors off for a while, is basically what you're saying.

Yeah. By court order, it stops them from foreclosing, stops them from coming and getting the big combine that the debtor really needs to generate income.

In your experience, Patrick, do farmers, ranchers, ag people that get in this kind of trouble? Are they typically able to recover?

Yes. And the reason for that is, you know, I'm pretty selective in the cases. If I've got somebody coming in and their budget is really just dead on arrival. I'm not going to file a chapter 12 for them. They're probably going to file a Chapter seven liquidation. And where that, unfortunately, right now is the most common are dairies very, very difficult for a dairy to reorganize. And the reason for that is in this climate, they just simply cannot generate enough income and really have any hope of repaying creditors what they need to be repaid.

But dairies have been in trouble for a long time.

They have. But really what you're seeing now is it's rare for someone to come in and purchase a herd of producing dairy cows. That's a shame.