Illinois grain shipper files for bankruptcy

Trans Coastal Supply Co. sought Chapter 11 bankruptcy protection from creditors late Thursday, blaming losses and broken sales contracts after China began rejecting corn shipments in late 2013 when officials detected a genetically engineered strain that Beijing had not approved.

Trans Coastal's filing in the U.S. Bankruptcy Court for the Central District of Illinois shows how disputes over Syngenta's Viptera corn continue to reverberate in the U.S. Farm Belt. Grain companies and farmers have blamed Syngenta for hundreds of millions of dollars in losses because of rejected shipments and declines in the market price for corn that they say resulted from the episodes.

Syngenta began selling Viptera in the U.S., Argentina and Brazil in 2011, with those governments' approval, but China didn't approve the strain until late last year. More than 180 separate lawsuits have been filed against Syngenta in the matter.

Pamela Moses, Trans Coastal's president, told employees and customers in a letter Thursday that the company "had been led to believe" that the Syngenta strain was soon to be approved for import into China and that until then it wouldn't turn up in shipping channels. Trans Coastal ships corn, soybeans and other commodities to ports across Asia, including China.

"Neither of these things turned out to be true," Moses said. "The predictable result was a downward spiral that included abandoned cargos, rejected documents, rejected cargos, devaluation of markets, and defaulted sales contracts by customers uncertain of their ability to accept delivery, which, combined with our losses resulting from the opposite purchase contracts have debilitated our company."

Trans Coastal hopes to restructure in bankruptcy court, and the company's lawsuit against Syngenta will continue, said Jayne Conroy, a lawyer with Simmons Hanly Conroy LLC which is representing Trans Coastal in the lawsuit.

Trans Coastal and Cargill sued Syngenta over rejected corn shipments in September. Archer Daniels Midland filed suit two months later.

Syngenta in June sought to dismiss the lawsuits, which have been consolidated in a U.S. District Court in Kansas, saying it shouldn't be held liable for the losses. Plaintiffs in the case on Monday filed a motion opposing any dismissal, and a ruling on Syngenta's dismissal request is expected by early September, according to Conroy.

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