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therein were perfected. Also, as further security and as a loan
repayment mechanism, the farmers assigned to Blackland their
rights to crop insurance payments and to U.S. Department of
Agriculture price support and production adjustment payments
(hereinafter “Government payments”).
The Government payments received by Blackland on behalf of
the tenant farmers, as a result of the above assignment, were the
primary source of the funds that were transferred by Blackland to
petitioner.
By September of 1995, the tenant farmers owed Blackland
approximately $3,250,000.
In September of 1995, based apparently on projected net
losses for the tenant farmers, petitioner ceased transferring
funds to Blackland except to the extent necessary for Blackland
to finance the current harvest of various farmers’ crops.
In October of 1995, letters were mailed on behalf of
Blackland notifying suppliers of certain tenant farmers that
Blackland would not pay any more expenses of the tenant farmers
and notifying wholesalers (to whom the farmers sold crops) of the
liens Blackland possessed on the crop sales proceeds.
As of December 31, 1995, the above-referred-to worksheets
reflecting fund transfers between petitioner and Blackland
reflect a purported total loan balance due from Blackland to
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Last modified: May 25, 2011