An involuntary bankruptcy petition has been filed against a Terry County agricultural processor.
West Texas Guar, Inc. of Brownfield, TX is said to owe nearly $4 million to at least two dozen farmers, many of them located in the South Plains region.
Lubbock lawyer Fernando Bustos filed three lawsuits against the processing plant in the past two weeks and obtained restraining orders to keep it from operating.
Byrnie Bass, a Lubbock attorney, says he heard the plant is continuing to operate despite the restraining orders. He says that is one of the reasons that led him to file the petition on their behalf. He says that is one of the reasons why the involuntary bankruptcy was filed.
"We need to get to the bottom of that," Bass said.
An involuntary bankruptcy can be filed when three creditors have not been paid a total of $12,000.
Bass says each farmer in this case acts as a creditor to West Texas Guar.
"Out here in particularly, most farmers...their word is their bond and their handshake is good and that's the way they expect other people to respond to them and that is not what these guys did to them," Bass said.
Bass says last summer about 400 farmers contracted with the processor. The deal was to grow guar and ship it to the Terry County plant in exchange for a paycheck 45 days later. Bass, who is representing 24 of those farmers, says the guar was grown and handed over but no money was ever seen.
"They entered into this deal with good faith. They grew the crop and thought they were going to get paid. Now that they're not getting paid, they can't pay their bank and so they're just wondering how they are going to get out of it," Bass said.
Bass said West Texas Guar, Inc. could owe as much as $18 million to these farmers.
Sources say that the company had intended to pay the farmers only half of what is due while paying the other half over a two-year period.
The company processes guar, a drought-resistant legume that is used in many food products, such as ice cream and salad dressing.
Guar is also used in larger volumes in the fracturing of oil and gas wells.
Bass says the company has been around for 20 years, but he heard there has been a recent change of ownership and management.
The reason why the company defaulted on those contracts is still unclear to him, but he says he is determined to find out.
"My grandfather was a farmer. You just hate to see those guys...it's a hard enough life as it is. And then to have something like this kick you around...I don't like it," he said
According to Bustos, West Texas Guar's majority stockholder is Scopia Capital, a $3 billion hedge fund located in New York City.
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