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1 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 1 of 17 B1040 (FORM 1040) (12/15) ADVERSARY PROCEEDING COVER SHEET (Instructions on Reverse) ADVERSARY PROCEEDING NUMBER (Court Use Only) PLAINTIFFS M. Randy Rice, Trustee DEFENDANTS Agrimarketing Inc. dba Minturn Grain ATTORNEYS (Firm Name, Address, and Telephone No.) Rice & Associates, P.A. 523 S. Louisiana, #300 Little Rock, AR PARTY (Check One Box Only) Debtor U.S. Trustee/Bankruptcy Admin Creditor Other x Trustee ATTORNEYS (If Known) Ralph W. Waddell P. O. Box 1700 Jonesboro, AR PARTY (Check One Box Only) Debtor U.S. Trustee/Bankruptcy Admin x Creditor Other Trustee CAUSE OF ACTION (WRITE A BRIEF STATEMENT OF CAUSE OF ACTION, INCLUDING ALL U.S. STATUTES INVOLVED) Complaint to avoid and recover preferential and/or fraudulent transfer(s) of Debtor's interest in property. 11 USC 101 et seq. NATURE OF SUIT (Number up to five (5) boxes starting with lead cause of action as 1, first alternative cause as 2, second alternative cause as 3, etc.) FRBP 7001(1) Recovery of Money/Property 11-Recovery of money/property turnover of property 1 12-Recovery of money/property preference 2 13-Recovery of money/property fraudulent transfer 14-Recovery of money/property - other FRBP 7001(2) Validity, Priority or Extent of Lien 21-Validity, priority or extent of lien or other interest in property FRBP 7001(3) Approval of Sale of Property 31-Approval of sale of property of estate and of a co-owner - 363(h) FRBP 7001(4) Objection/Revocation of Discharge 41-Objection / revocation of discharge - 727(c),(d),(e) FRBP 7001(5) Revocation of Confirmation 51-Revocation of confirmation FRBP 7001(6) Dischargeability 66-Dischargeability - 523(a)(1),(14),(14A) priority tax claims 62-Dischargeability - 523(a)(2), false pretenses, false representation, actual fraud 67-Dischargeability - 523(a)(4), fraud as fiduciary, embezzlement, larceny (continued next column) FRBP 7001(6) Dischargeability (continued) 61-Dischargeability - 523(a)(5), domestic support 68-Dischargeability - 523(a)(6), willful and malicious injury 63-Dischargeability - 523(a)(8), student loan 64-Dischargeability - 523(a)(15), divorce or separation obligation (other than domestic support) 65-Dischargeability - other FRBP 7001(7) Injunctive Relief 71-Injunctive relief imposition of stay 72-Injunctive relief other FRBP 7001(8) Subordination of Claim or Interest 81-Subordination of claim or interest FRBP 7001(9) Declaratory Judgment 91-Declaratory judgment FRBP 7001(10) Determination of Removed Action 01-Determination of removed claim or cause Other SS-SIPA Case 15 U.S.C. 78aaa et.seq. 02-Other (e.g. other actions that would have been brought in state court if unrelated to bankruptcy case) Check if this case involves a substantive issue of state law Check if this is asserted to be a class action under FRCP 23 Check if a jury trial is demanded in complaint Demand $ 950, Other Relief Sought

2 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 2 of 17 B1040 (FORM 1040) (12/15) NAME OF DEBTOR Turner Grain Merchandising, Inc. BANKRUPTCY CASE IN WHICH THIS ADVERSARY PROCEEDING ARISES BANKRUPTCY CASE NO. 2:14-bk-15687J DISTRICT IN WHICH CASE IS PENDING DIVISION OFFICE NAME OF JUDGE Eastern District of Arkansas Helena Jones RELATED ADVERSARY PROCEEDING (IF ANY) PLAINTIFF DEFENDANT ADVERSARY PROCEEDING NO. DISTRICT IN WHICH ADVERSARY IS PENDING DIVISION OFFICE NAME OF JUDGE SIGNATURE OF ATTORNEY (OR PLAINTIFF) /s/ Hamilton Moses Mitchell DATE 10/06/2015 PRINT NAME OF ATTORNEY (OR PLAINTIFF) Hamilton Moses Mitchell INSTRUCTIONS The filing of a bankruptcy case creates an estate under the jurisdiction of the bankruptcy court which consists of all of the property of the debtor, wherever that property is located. Because the bankruptcy estate is so extensive and the jurisdiction of the court so broad, there may be lawsuits over the property or property rights of the estate. There also may be lawsuits concerning the debtor s discharge. If such a lawsuit is filed in a bankruptcy court, it is called an adversary proceeding. A party filing an adversary proceeding must also must complete and file Form 1040, the Adversary Proceeding Cover Sheet, unless the party files the adversary proceeding electronically through the court s Case Management/Electronic Case Filing system (CM/ECF). (CM/ECF captures the information on Form 1040 as part of the filing process.) When completed, the cover sheet summarizes basic information on the adversary proceeding. The clerk of court needs the information to process the adversary proceeding and prepare required statistical reports on court activity. The cover sheet and the information contained on it do not replace or supplement the filing and service of pleadings or other papers as required by law, the Bankruptcy Rules, or the local rules of court. The cover sheet, which is largely selfexplanatory, must be completed by the plaintiff s attorney (or by the plaintiff if the plaintiff is not represented by an attorney). A separate cover sheet must be submitted to the clerk for each complaint filed. Plaintiffs and Defendants. Give the names of the plaintiffs and defendants exactly as they appear on the complaint. Attorneys. Give the names and addresses of the attorneys, if known. Party. Check the most appropriate box in the first column for the plaintiffs and the second column for the defendants. Demand. Enter the dollar amount being demanded in the complaint. Signature. This cover sheet must be signed by the attorney of record in the box on the second page of the form. If the plaintiff is represented by a law firm, a member of the firm must sign. If the plaintiff is pro se, that is, not represented by an attorney, the plaintiff must sign.

3 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 3 of 17 IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF ARKANSAS HELENA DIVISION IN RE: TURNER GRAIN MERCHANDISING, INC., Case No.2:14-bk-15687J Debtor Chapter 7 Converted from Chapter 11 M. RANDY RICE, TRUSTEE PLAINTIFF VS. CASE NO. AGRI MARKETING, INC., DBA MINTURN GRAIN DEFENDANT COMPLAINT Comes now M. Randy Rice, Chapter 7 Trustee (the Trustee ), by and through counsel, and for his Complaint, states as follows: PARTIES & JURISDICTION 1. The Plaintiff, M. Randy Rice ( the Trustee ), is the duly appointed and acting Chapter 7 Trustee of the above referenced bankrupt estate, and it is in said capacity that he brings the instant causes of action. 2. The Defendant, Agri Marketing Inc. dba Minturn Grain ( Minturn Grain ), is a domestic corporation existing and operating under the laws of the State of Arkansas, and its principal place of business is located at 1403 Highway 67, Hoxie, Arkansas. 3. The Trustee brings the instant causes of action to avoid preferential transfers made to Minturn Grain within ninety (90) days of filing of the petition. This Court has jurisdiction over this Complaint and the parties pursuant to 28 USC 1334 and 157, 11 USC 101, 541, 542, 544, 547, 550, and 551. Venue is proper in this district pursuant to 28 USC 1409.

4 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 4 of This is a core proceeding within the meaning of 28 USC 157(b)(2)(A), (B), (F), and (O), and it constitutes an adversary proceeding pursuant to the applicable provisions of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. PROCEDURAL BACKGROUND 1. On September 11, 2014, Kevin P. Keech was appointed the receiver of the receivership estate of Turner Grain Merchandising, Inc. dba Turner Grain dba Turner Grain, Inc. ( the Debtor ), pursuant to an order entered by the United States District Court for the Eastern District of Arkansas, Eastern Division, Case No. 2:14-CV- 111-JM. 2. The receiver filed a voluntary Chapter 11 bankruptcy petition on behalf of the Debtor on October 23, 2014 ( the petition date ), and initially acted as the debtor-inpossession. 3. The Debtor s case was converted to a case under Chapter 7 on May 15, 2015, and Richard L. Cox was appointed the Chapter 7 Trustee of the Debtor s estate on the same date. Richard L. Cox filed a Resignation and Accounting of Trustee on May 12, 2016, and the Trustee was appointed the successor trustee of the Debtor s estate on the same date. FACTUAL ALLEGATIONS 4. The Debtor was incorporated on or about August 7, 2002, and it was engaged in the agricultural industry prior to the petition date. The Debtor purchased and sold agricultural products in and around the State of Arkansas. 5. Minturn Grain owns and operates a grain elevator in or around Hoxie, Arkansas. 2

5 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 5 of The Debtor purchased grain from Minturn Grain during the 2014 calendar year. The grain was delivered and sold on an unsecured basis pursuant to one or more written or verbal agreements. The Debtor thereafter made the following payments by money order and check to Minturn Grain: Date Instrument No. (Bank Account) Amount 07/29/2014 Money Order No (M&P 1001) $ 250, /31/2014 CC No (HNB 9157) 450, /01/2014 CC No (HNB 9157) 250, Total $950, A copy of the money order debit and canceled cashier s checks are attached hereto as Exhibit A and incorporated herein by reference. The Trustee is of the opinion and belief that Minturn Grain received the payments set forth above and that said payments were made in consideration of grain sold to the Debtor by Minturn Grain during or before the 2014 calendar year. 7. Minturn Grain is a scheduled unsecured creditor of the Debtor. Minturn Grain is a claimant and creditor herein by virtue of filing Proof of Claim Nos. 28-1, 29-1, and 30-1 in the total amount of $403, in the lead bankruptcy on March 2, COUNT I AVOIDANCE OF PREFERENTIAL TRANSFERS 11 USC The Trustee incorporates all preceding paragraphs as if fully re-alleged herein, and states that the payments in the total amount of $950, to Minturn Grain resulted in an avoidable preferential transfer within the meaning of Section 547 of the Bankruptcy Code. 3

6 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 6 of The payments resulted in transfers of property of the Debtor to or for the benefit of a creditor on or within ninety (90) days of the order for relief. The payments were comprised of funds owned by the Debtor, and the payments were drawn from a deposit account with respect to which the Debtor was the sole owner. Minturn Grain is a creditor of the Debtor. Minturn Grain s claim against the Debtor is evidenced, inter alia, by the grain sold and delivered to the Debtor by Minturn Grain on an unsecured basis. The payments were made on and between July 29, 2014, and August 1, 2014, whereas the Debtor filed for bankruptcy protection on October 23, Thus, each of the transfers occurred within the ninety (90) day preference period. 10. The transfers were for or on account of antecedent debts owed by the Debtor before the transfers were made. On information and belief, the payments made by the Debtor to Minturn Grain were on account of grain purchased by the Debtor beginning on or before June 12, 2014, whereas the subject payments were made from July 29, 2014, through August 1, The transfers were made while the Debtor was insolvent. The Debtor made the payments to Minturn Grain within the ninety (90) day period immediately preceding the petition date. The Debtor is presumed to have been insolvent on and during the ninety (90) days immediately preceding the date of the filing of the petition. 11 USC 547(f). The Debtor s insolvency is further evidenced by the Summary of Schedules, Schedules A-E, and the Proofs of Claim filed in the bankruptcy case. 12. To the extent Minturn Grain received the payments set forth above from the Debtor, said transfers enabled Minturn Grain to recover more than it would receive as a creditor if: 4

7 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 7 of 17 a. This was a case under Chapter 7 of Title 11 of the Bankruptcy Code; b. The transfers had not been made; and c. Minturn Grain received payment of its debt to the extent provided by the provisions of the Bankruptcy Code. The payments made by the Debtor to Minturn Grain were on account of one or more unsecured claims namely, grain sold and delivered to the Debtor by Minturn Grain on an unsecured basis. It is well-settled law that a creditor who receives payment on account of an unsecured claim has always been preferred. In Re Frankum, 453 B.R. 352 (Bankr. E.D. Ark. 2011) citing In re Auto-Train Corp., 49 B.R. 605, 610 (Bankr. D.D.C.1985) ( He has obtained an unfair advantage at the expense of other creditors because he has receive[d] a greater proportion of [his] unsecured claims than other unsecured claimants who received payment after liquidation. ); see also, Hoffinger Indus., Inc. v. Bunch (In re Hoffinger Indus., Inc.), 313 B.R. 812, 827 (Bankr. E.D.Ark.2004) ("[It is] generally well settled that unless creditors would receive a 100% payout, any unsecured creditor who receives a payment during the preference period is in a position to receive more than it would have received under a Chapter 7 liquidation.") (internal quotation marks and citations omitted); accord Still v. Rossville Bank (In re Chattanooga Wholesale Antiques, Inc.), 930 F.2d 458, 465 (6th Cir.1991); Zachman Homes, Inc. v. Oredson (In re Zachman Homes, Inc.), 40 B.R. 171, 173 (Bankr.D.Minn.1984). On its bankruptcy schedules, the Debtor listed $13,773, in total assets and $24,848, in total liabilities, and the Court s claims register reflects claims in the total amount of $39,748, filed to date. Therefore, it is without question that each of the payments made by the Debtor to Minturn Grain enabled 5

8 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 8 of 17 Minturn Grain to receive more on its unsecured claim than it would under a hypothetical Chapter 7 liquidation. 13. Minturn Grain has not returned the transferred property to the estate despite demand by the Trustee. 14. During the course of this proceeding, the Trustee may learn (through discovery or otherwise) of additional facts and information concerning the transfers and/or of additional transfers made to Minturn Grain by the Debtor during the preference period. It is the Trustee s intention to avoid and recover all transfers made by or for the Debtor of an interest of the Debtor in property to or for the benefit of Minturn Grain or any other transferee. The Trustee reserves the right to amend this original Complaint so as to include: (i) further information regarding the transfers, (ii) additional transfers, (iii) modifications of and/or revision to Minturn Grain s name, (iv) additional defendants, and/or (v) additional causes of action (including, but not limited to, 11 USC 542, 544, 548, 549, and 550) (collectively the Amendments ), that may become known to the Trustee at any time during this adversary proceeding, through formal discovery or otherwise, and for the Amendments to relate back to this original Complaint. herein. COUNT II - CONSTRUCTIVELY FRAUDULENT TRANSFERS 11 USC 548(a)(1)(B) 15. The Trustee incorporates all preceding paragraphs as if fully re-alleged 16. To the extent that one or more Transfers (or such other transfers that may be identified or discovered during the discovery process) were not on account of an antecedent debt or a prepayment for goods subsequently received, the Debtors did not 6

9 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 9 of 17 receive reasonably equivalent value in exchange for such Transfer(s) (the Potentially Fraudulent Transfers ); and 548(a)(1)(B) A. The Debtor was insolvent on the date that the Transfer(s) was made or became insolvent as a result of the Transfer(s); or B. The Debtor was engaged in a business or a transaction, or was about to engage in business or a transaction for which any property remaining with the Debtor was an unreasonably small capital; or C. The Debtor intended to incur, or believed it would incur, debts that would be beyond its ability to pay as such debts matured. 17. The Potentially Fraudulent Transfers are avoidable pursuant to 11 USC COUNT III - RECOVERY OF AVOIDED TRANSFERS 11 USC 544 and The Trustee incorporates all preceding paragraphs as if fully re-alleged herein, and states that the avoided transfers may be recovered from Minturn Grain. USC 547(b). 19. The Trustee is entitled to avoid the transfers set forth above pursuant to Minturn Grain was the initial transferee of the avoidable transfers or was the immediate or mediate transferee of such initial transferee or the person for whose benefit the transfers were made. 21. Pursuant to 11 USC 544 and 550(a), the Trustee is entitled to recover from Minturn Grain all avoided transfers, plus interest thereon to the date of payment and the costs of this action. herein. COUNT IV DISALLOWANCE OF CLAIMS 11 USC 502(d) and (j) 22. The Trustee incorporates all preceding paragraphs as if fully re-alleged 7

10 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 10 of Minturn Grain is an entity from which property is recoverable under 11 USC Minturn Grain is a transferee of transfers avoidable under 11 USC Minturn Grain has not returned the transferred property for which it is liable under 11 USC Pursuant to 11 USC 502(d), any and all Claims of Minturn Grain and/or its assignee, against the Debtor s estate must be disallowed until such time as Minturn Grain pays to Trustee an amount equal to the aggregate amount of all avoided transfers, plus interest thereon and costs. 25. Pursuant to 11 USC 502(j), any and all Claims of Minturn Grain and/or its assignee, against the Debtor s estate must be disallowed until such time as Minturn Grain pays to Trustee an amount equal to the aggregate amount of all avoided transfers, plus interest thereon and costs. WHEREFORE, the Trustee respectfully requests this Court grant the following relief against the Defendant: A. That all transfers made by the Debtor to Defendant avoidable under 11 USC 547 and/or 548 be avoided and automatically preserved for the benefit of the estate pursuant to 11 USC 551; B. That all transfers, to the extent avoided pursuant to 11 USC 547 and/or 548, be recovered by Plaintiff pursuant to 11 USC 550; C. Awarding pre-judgment interest at the maximum legal rate running from the date of each Transfer to the date of judgment herein; 8

11 2:16-ap Doc#: 1 Filed: 10/06/16 Entered: 10/06/16 16:16:02 Page 11 of 17 D. Awarding post-judgment interest at the maximum legal rate running from the date of judgment herein until the date the judgment is paid and satisfied in full, plus costs; E. Requiring Defendant to pay forthwith the judgment amount awarded in favor of Plaintiff; F. Disallowing all claims of Defendant, or its assignee, until such time as the Defendant pays an amount equal to the aggregate amount of all avoided transfers, plus interest thereon and costs proper. G. Granting Plaintiff such other and further relief as the Court deems just and DATE October 6, 2016 Respectfully submitted, M. RANDY RICE, TRUSTEE By: /s/ Hamilton Moses Mitchell, Attorney Rice & Associates, P.A. 523 S. Louisiana, #300 Little Rock, AR

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