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Grundy County, Iowa, Farmer Sues Bankrupt Farm Equipment Maker

Posted on: Thursday, 2 February 2006, 18:01 CST

By Matthew Wilde, Waterloo-Cedar Falls Courier, Iowa

Feb. 2--DIKE -- A Grundy County farmer who claims he lost thousands of dollars when Walterman Implement was forced into bankruptcy has sued two finance companies associated with farm equipment maker Case New Holland for fraud.

Eric Andersen, owner of Andersen Ag Enterprises of rural Dike, filed the lawsuit in Grundy County District Court against Case Credit Corp. and CNH Capital America on Tuesday. The two companies are the lending arms of CNH, one of the world's largest farm equipment manufacturers.

Anderson is seeking a judgment of $16,045.74, along with punitive damages, lawyer fees and other expenses, against Case Credit and CNH Capital America for seizing money he paid for a Case-IH combine that was never delivered. He purchased the harvester at Walterman Implement in Dike.

CNH Capital America forced Walterman into Chapter 7 bankruptcy claiming misappropriation of funds and unpaid debt totaling $22 million.

Andersen's suit alleges the defendants failed to notify him of pending legal and financial troubles, which the companies knew about.

The suit also claims Walterman worked on behalf of the defendants.

Normally combine roll money --- a program that allowed farmers trade in a combine year after year for a newer one at a relatively low cost --- wasn't collected until mid-November, court documents said. However, this year Walterman representatives asked for it early, which Andersen paid on Oct. 10. Eleven days later the bankruptcy was filed and Anderson was out his money and the combine was never delivered.

"The defendants knowingly failed to make the disclosure in order to benefit their own financial interest with the intent to deceive the plaintiff," court documents said.

Andersen was unavailable for comment. One of his attorneys, Corey Lorenzen, said he can't comment on the case because the lawsuit is active.

Andersen's lawsuit was filed the same day that more than 100 farmers impacted by the Walterman bankruptcy met in Maxwell to discuss legal action against CNH and/or its lending arms. Nearly all of them participated in the dealership's combine roll program and paid for next year's machine, but didn't get it and the money wasn't returned.

The farmers believe CNH America waited to file bankruptcy papers until farmers paid their money, so they can get as much money back as possible from bankruptcy court.. CNH previously claimed the roll money was missing.

CNH officials declined to comment on the Andersen suit, as well as another filed in U.S. District Court in Des Moines earlier this month for $250,000 by a Mitchellville farmer.

"We're sorting through the complexity of the bankruptcy process and are exploring every option that supports customers and makes good business sense," said Tom Witom, CNH spokesperson.

The farmers at the Maxwell meeting don't think CNH is doing anything to support their customers. In fact, many consider themselves ex-customers.

They elected eight people to represent the group. Ted Hamer of Traer is one of two farmers representing colleagues in Northeast Iowa. In the next two days, he believes the committee will hire a law firm, which will then make a recommendation whether there's enough evidence to take CNH to court.

Farmers are hoping a united front will grab CNH's attention. The group wants roll contracts honored or money refunded. Hamer paid $16,000 for a 1-year-old combine he didn't receive.

"Absolutely we're hoping Case pays attention," Hamer said. "Right now talking with them individually hasn't caused much of a concern. I have an awful sour taste in my mouth toward Case New Holland."

Hamer said Walterman combine roll customers who want to join their group can call him at (319) 988-4344. Initial attorney fees are estimated at $100 to $200 each, which could increase or decrease depending on the number of people participating in the suit or if one is even filed.

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Copyright (c) 2006, Waterloo-Cedar Falls Courier, Iowa

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Source: Waterloo Courier

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