Hansen-Mueller: Grain Dealer Collapse Leaves 1,000+ Farmers Across 34 States Seeking Recovery

Hansen-Mueller Co., a Nebraska-based grain merchandiser with nine elevators holding 30 million bushels and five port terminals from Duluth to Houston, filed for chapter 11 bankruptcy on November 17, 2025, in the U.S. Bankruptcy Court for the District of Nebraska. The filing came three weeks after the Nebraska Public Service Commission suspended the company's grain trading license for failing to pay more than $2 million to Nebraska farmers for grain delivered between August 2024 and October 2025. Bankruptcy filings show approximately $39.5 million in losses on failed ventures outside its core grain trading business, including a $15 million pasta plant conversion, $11 million in proprietary trading software that was abandoned, and $10 million in elevator acquisitions.

With estimated creditors between 1,000 and 5,000 spanning 34 states and assets and liabilities each in the $100-500 million range, the Hansen-Mueller bankruptcy tested state grain indemnity funds and involved Bankruptcy Code Section 557's expedited procedures for grain producers. The liquidation took 29 days from filing to auction, and creditors raised concerns about fire-sale pricing. The case shows the interaction between state regulatory frameworks, farm-specific Bankruptcy Code provisions, and the effects of a single grain dealer failure on farm operations.

Company Profile and Operations

Hansen-Mueller operated as a nationwide merchandiser and processor of grain with a diversified agribusiness platform spanning more than 40 years. The company's business model centered on buying grain from farmers and agricultural cooperatives, aggregating it at elevators, and merchandising it to domestic processors and export markets through port terminal facilities. This model required substantial working capital to fund grain purchases ahead of sales, making the company dependent on revolving credit facilities and the timely collection of receivables.

The company's operations were organized into four primary business units. The Oat Trading division processed oats for pet food and animal feed markets at the company's Toledo facility, representing a vertically integrated operation that bought raw oats from Midwest farmers and processed them into value-added ingredients for major pet food manufacturers. Wheat Merchandising served both domestic flour mills and export markets, managing the logistical complexities of moving wheat from farm to mill or port. Cross-Country Trading managed multi-grain logistics and arbitrage opportunities across the company's network, exploiting geographic and temporal price differentials in corn, soybeans, and specialty grains. The Houston Joint Venture, operated through Hansen Metro Elevation, LLC, provided Gulf Coast export access for grain moving from the Midwest to international markets.

The company's physical infrastructure represented decades of growth and acquisition. The nine grain elevators collectively held 30 million bushels of storage capacity spread across the Great Plains and Midwest, providing the physical collection points where farmers delivered their harvests. The five port terminal operations in Duluth, Minnesota; Houston, Texas; Superior, Wisconsin; and Toledo, Ohio provided export access—the endpoints of the supply chain where grain was loaded onto vessels for domestic or international shipment. The Toledo facility served dual purposes as both a port terminal with Great Lakes shipping access and the company's oats processing plant, producing ingredients for pet food and animal feed manufacturers from raw oats sourced from upper Midwest farmers.

In 2019, Hansen-Mueller acquired a 1.4 million bushel grain facility in Minneapolis with both rail and truck access, expanding its Twin Cities presence. The company also purchased Duluth's Elevator A, a 3.5 million bushel facility that complemented its existing Superior operations, creating a Twin Ports complex positioned for Great Lakes shipping. These acquisitions expanded the company's scale and geographic reach while adding to its debt burden. Trading offices in Toledo, Omaha, Salina, Kansas City, Tallulah, Grand Island, and Alabaster coordinated grain movements across this network, employing approximately 120 people who managed the daily operations of buying, storing, and selling millions of bushels of grain.

Path to Financial Distress: Failed Ventures and Regulatory Crisis

The $39.5 Million in Losses.

The company attributed its financial distress in the First Day Declaration to a series of failed ventures outside its core grain merchandising business that totaled approximately $39.5 million in losses and reduced liquidity. CRO Michael Compton described the losses as stemming from ventures outside the core grain trading business.

The most significant loss came from an attempted conversion of the Toledo facility to pasta manufacturing between 2017 and 2022, which resulted in approximately $15 million in losses.

The company also invested approximately $11 million developing proprietary grain trading software and later abandoned the project.

A third major failure involved the acquisition and attempted integration of eight grain elevators during 2016-2017, resulting in approximately $10 million in losses. Additional arbitration losses of approximately $3.5 million from trade disputes added to the total.

Regulatory Crisis as the Filing Trigger.

The Nebraska Public Service Commission issued a suspension of Hansen-Mueller's grain trading license on October 24, 2025, after the company failed to pay more than $2 million to Nebraska farmers for grain delivered between August 30, 2024, and October 21, 2025. Under Nebraska law, grain dealers must maintain a security bond with the PSC; Hansen-Mueller's bond was $1 million.

The license suspension was followed by inquiries from other state agricultural agencies, creditor review by the secured lender syndicate—BMO Harris Bank as agent, along with Farm Credit Services of America, Farm Credit Mid-America, and CoBank—and demands for payment from trade creditors. The company filed for chapter 11 three weeks later.

The company reportedly made approximately $2.1 million in payments to Nebraska farmers shortly after the license suspension, leading the PSC to withdraw its complaint and reinstate the license. Texas producers remained unpaid after the Nebraska settlement, and Texas Agriculture Commissioner Sid Miller publicly urged the company to meet its obligations to Texas grain producers. Farmers who had delivered grain during the 2024-2025 harvest season were still awaiting payment.

Multi-State Agricultural Impact

Geographic Distribution of Creditors.

The bankruptcy affected farmers across 34 states, with the concentration of creditors showing Hansen-Mueller's footprint in the Great Plains and Midwest grain belt. Kansas was hardest hit with 128+ creditors, followed by Nebraska with 87+, Texas with 72+, Minnesota with 62+, and Missouri with 52+. North Dakota farmers were owed $22,000 or more. State agriculture commissioners across the affected states urged farmers to file claims and provided guidance on bankruptcy claims procedures and state indemnity fund applications.

The Kansas Licensing Gap.

The Hansen-Mueller bankruptcy highlighted a regulatory gap that left Kansas farmers—the largest single group of creditors—without state-level protections. Despite having 128+ Kansas creditors, Hansen-Mueller was not licensed as a grain dealer in Kansas. The company operated in Kansas using its Nebraska grain dealer license, but Kansas farmers cannot access Kansas's grain indemnity fund or other state-level grain warehouse protections without the dealer being licensed in Kansas. This operating model, where a dealer maintains licensing in selected jurisdictions while buying grain across state lines, left Kansas farmers with unsecured claims in bankruptcy and no state indemnity fund coverage.

Texas Producers Invoke Section 557.

Eleven Texas agricultural entities asserted claims totaling $1,408,100.45 for corn and wheat delivered between June 17 and October 27, 2025, and filed emergency motions invoking Bankruptcy Code Section 557's special protections for grain producers. The Texas producers' legal theory rested on Texas Property Code sections 70.403 and 70.4045, which create automatically attaching, statutorily perfected agricultural liens on grain and grain proceeds. The producers claimed these state agricultural liens have "super priority" over BMO Harris Bank's security interest on the same collateral.

Section 557 of the Bankruptcy Code provides expedited procedures for resolving disputes over grain and grain proceeds, requiring completion within 120 days.

The Texas producers sought a complete accounting of all grain and proceeds held by the debtor, segregation of proceeds from grain delivered since June 1, 2025, and protection of sale proceeds pending Section 557 determinations. The producers also filed notices of perfection under section 546(b)(1)(A) to preserve their 90-day perfection window for the agricultural liens. The emergency motion filed December 5-6, 2025, represented the first significant use of Section 557 in recent grain dealer bankruptcies. The hearing was continued to December 22, 2025, and the parties ultimately reached a Stipulation and Agreed Order entered January 9, 2026, establishing comprehensive procedures for determining grain claims, with a February 2, 2026, claim deadline and a February 17, 2026, pretrial hearing.

State Grain Indemnity Funds Under Stress.

The bankruptcy triggered the first major test of Minnesota's grain indemnity fund, with 62+ Minnesota creditors potentially eligible for coverage. State grain indemnity funds provide compensation when grain dealers fail to pay farmers for delivered grain.

Iowa's grain indemnity fund, created in 1986, held approximately $12.6 million and provides coverage of up to 90% of losses with a maximum of $400,000 per claimant. The fund is supported by assessments on grain handled in Iowa. Iowa farmers face a March 17, 2026, deadline to file indemnity fund claims—120 days from the bankruptcy filing. The Iowa Department of Agriculture issued a formal notice advising affected farmers of their rights and the claim process, including the requirement that claimants first pursue bankruptcy recovery before accessing the indemnity fund.

State indemnity fund structures vary. Farmers in states without such funds—or in states like Kansas where Hansen-Mueller lacked proper licensing—did not have access to state-level indemnity coverage.

The Liquidation Process

Prepetition Capital Structure.

Hansen-Mueller's secured debt totaled approximately $53.5 million, with BMO Harris Bank N.A. serving as agent for a syndicate of secured creditors that included agricultural lending specialists. The principal amount owed to the secured lending group was approximately $50,883,149.20, plus a deficiency fee of $2,598,404.00. The syndicate included Farm Credit Services of America, PCA; Farm Credit Mid-America, PCA; and CoBank, FCB—all participating lenders with pro rata shares of the secured claims. The Farm Credit System lenders are government-sponsored enterprises specializing in agricultural lending, making their participation in the Hansen-Mueller credit facility typical for a grain merchandising operation of this scale.

The company operated during the bankruptcy on cash collateral rather than obtaining traditional DIP financing. The court entered an interim Cash Collateral Order authorizing cash collateral use with adequate protection provided through replacement liens on post-petition assets and superpriority claims for any diminution in collateral value. The order included budget and variance reporting.

Section 363 Sale: 29 Days from Filing to Auction.

The sale process moved on a compressed timeline that drew objections from the Official Committee of Unsecured Creditors. The Bidding Procedures Motion was filed simultaneously with the bankruptcy petition on November 17, 2025. The court entered the Bidding Procedures Order on December 3, 2025. The stalking horse bid deadline fell on December 8, with the general bid deadline on December 12, and the auction itself on December 16—29 days after the bankruptcy filing.

The creditors' committee objected to the timeline, warning that the rapid sale risked "fire-sale prices" and advocating for additional marketing time to maximize value. The court approved the procedures despite these objections.

Auction Results and Asset Disposition.

The December 16, 2025, auction sold 27 asset lots to multiple buyers for an aggregate purchase price of $24,172,850, according to the Declaration of Mark Warren. Redwood Group was the largest purchaser, winning 14 of the 27 lots. Paterson Grain acquired the Toledo facility, the company's oat processing operation and port terminal. West Plains purchased the wheat merchandising operations, acquiring the trading relationships and forward contracts that represented Hansen-Mueller's wheat business.

The assets offered included grain inventory and forward contracts across all facilities, real property and fixed assets at the Superior and Duluth locations, leased facilities in Sue City, Council Bluffs, and Grand Forks, and FF&E at all owned and leased locations. Certain assets were excluded from the sale: the subsidiary-owned Kansas City elevators in Missouri and Kansas (which would be addressed separately), the company's interest in the Houston joint venture (Hansen Metro Elevation, LLC), certain accounts receivable, a life insurance policy, and a specific forward contract with Louis Dreyfus Company that required separate treatment. The sale hearing on December 22, 2025 finalized the transactions, and the court entered the Sale Order on December 29, 2025, approving the sales free and clear of all liens and encumbrances. The order addressed outstanding objections, including the ongoing Section 557 proceedings brought by the Texas producers.

First-Day Relief and Case Administration.

The court approved first-day relief to permit the company to continue operations through the sale process. Cash collateral use was authorized on an interim basis and extended through four interim orders, with the Fourth Interim Order carrying authorization through February 20, 2026. Wages and employee benefits payments were authorized, along with insurance continuation, tax payments, and utility adequate assurance procedures. A Critical Vendors Motion authorized a program with a $1,200,000 aggregate cap for payments to vendors supporting grain handling operations.

The court also approved a Key Employee Incentive Plan on November 26, 2025, to retain personnel necessary to execute the sale process. Procedures for 503(b)(9) administrative claims—goods delivered within 20 days before filing—were approved on December 11, 2025, providing a mechanism for trade creditors who shipped grain or supplies immediately before the bankruptcy to receive administrative priority treatment.

An Official Committee of Unsecured Creditors was appointed shortly after filing, initially with seven members. The committee was later reconstituted to include eight members after the addition of Viserion Grain LLC, a significant unsecured creditor. Major trade creditors included Louis Dreyfus Company, LLC; The Andersons; Mennel Milling Company (which filed objections to certain sale terms); and Bunge Canada Inc. Agricultural creditors included numerous cooperatives and individual producers, with the eleven Texas agricultural entities asserting the $1.4 million in Section 557 claims representing a distinct category of claimants seeking super-priority treatment over the secured lenders.

Industry Context: Agricultural Supply Chain Vulnerabilities

Grain merchandisers buy grain from farmers, aggregate it at elevators, and sell it to processors and export markets. These intermediaries pay farmers before collecting from buyers and provide storage and logistics services for moving grain to processing facilities or export terminals.

The Hansen-Mueller bankruptcy affected 1,000+ farmers across 34 states.

The regulatory framework governing grain dealers operates on a state-by-state basis, with no federal licensing requirement creating uniform protections. The Kansas situation—128+ creditors in a state where Hansen-Mueller was not licensed as a grain dealer—shows how state licensing affects access to indemnity funds and other state-level protections.

The broader farm economy context in 2024-2025 included commodity price volatility and rising input costs.

Frequently Asked Questions

What is Hansen-Mueller Co. and what happened to it?

Hansen-Mueller was a Nebraska-based grain merchandiser with more than 40 years of operations, running nine elevators with 30 million bushels of storage capacity and five port terminals in Duluth, Houston, Superior, and Toledo. The company filed chapter 11 bankruptcy on November 17, 2025, after the Nebraska Public Service Commission suspended its grain trading license for failing to pay farmers over $2 million. The bankruptcy revealed approximately $39.5 million in losses from failed ventures outside the core grain business.

How many farmers were affected by the Hansen-Mueller bankruptcy?

The bankruptcy affected between 1,000 and 5,000 creditors across 34 states. Kansas had the most creditors at 128+, followed by Nebraska (87+), Texas (72+), Minnesota (62+), and Missouri (52+). The geographic spread reflects Hansen-Mueller's extensive trading operations throughout the Great Plains and Midwest grain belt.

What caused Hansen-Mueller's financial failure?

The company lost approximately $39.5 million on failed ventures: a $15 million pasta plant conversion attempt at the Toledo facility (2017-2022), $11 million in abandoned proprietary grain trading software development, $10 million in unsuccessful elevator acquisitions and integrations (2016-2017), and $3.5 million in arbitration losses from trade disputes. These losses depleted capital and left the company unable to pay farmers for grain deliveries.

What is Section 557 and why did Texas farmers invoke it?

Section 557 of the Bankruptcy Code provides expedited procedures for resolving disputes over grain and grain proceeds, requiring completion within 120 days. Texas farmers with $1.4 million in claims invoked it to assert that their state agricultural liens under Texas Property Code sections 70.403 and 70.4045 have "super priority" over the secured lender's security interest on grain proceeds.

Why couldn't Kansas farmers access state protections?

Despite having 128+ Kansas creditors—the most of any state—Hansen-Mueller was not licensed as a grain dealer in Kansas. The company operated in Kansas using its Nebraska license, but Kansas farmers cannot access Kansas's grain indemnity fund or other state-level protections without the dealer being properly licensed in Kansas. This regulatory gap left Kansas farmers with less protection than farmers in states where Hansen-Mueller maintained licensing.

What are grain indemnity funds and will they help farmers?

State grain indemnity funds compensate farmers when grain dealers fail to pay for delivered grain. Iowa's fund holds approximately $12.6 million and covers up to 90% of losses with a maximum of $400,000 per claimant. Minnesota's fund is facing its first major test since establishment. Farmers must typically pursue bankruptcy recovery first before accessing indemnity funds, and claim deadlines vary by state—Iowa's deadline is March 17, 2026.

Who bought Hansen-Mueller's assets?

The December 16, 2025, auction sold 27 lots to multiple buyers in just 29 days from filing. Redwood Group won 14 lots, making it the largest buyer. Paterson Grain acquired the Toledo facility (the oat processing and port terminal operation), and West Plains purchased the wheat merchandising operations. The sale hearing on December 22, 2025, finalized the transactions.

How fast was the sale process and why did creditors object?

The sale moved on a 29-day timeline from the November 17, 2025, petition to the December 16, 2025, auction. The Official Committee of Unsecured Creditors objected to this timeline, warning that the rapid sale risked "fire-sale prices" that would reduce recoveries for unsecured creditors including farmers. The court approved the procedures despite these objections.

What should affected farmers do?

Farmers owed money by Hansen-Mueller should file a proof of claim by January 26, 2026, the general bar date. Farmers should also contact their state agriculture department about grain indemnity fund claims—Iowa's deadline is March 17, 2026 (120 days from filing). Agricultural bankruptcy attorneys can advise on whether state agricultural lien claims may provide priority over general unsecured claims.

Will farmers recover their money?

Recovery for unsecured creditors depends on claim priority and available proceeds. Secured creditors (BMO Harris Bank and the Farm Credit lenders) have first priority on approximately $53.5 million. Texas producers are arguing their agricultural liens have super-priority status. Unsecured creditors typically receive limited recovery in liquidating chapter 11 cases, while state indemnity funds may provide partial recovery for farmers in states with adequate fund balances and proper licensing.

Who is the claims agent for Hansen-Mueller?

Epiq Bankruptcy Solutions, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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