LOVELAND — A bank in Louisiana is suing Loveland-based agriculture retailer Crop Production Services Inc. for more than $1.4 million in payments from farms that the bank alleges were erroneously signed over to CPS.
Franklin State Bank & Trust Co., in Winnsboro, La., filed the suit in U.S. District Court in Monroe, La., earlier this month.
Officials for neither the bank nor Crop Production Services could be reached for comment Monday.
In the complaint, FSB’s attorneys state that the bank had entered into inter-creditor agreements with CPS in 2014 and 2015 with a group of farms regarding crop proceeds for those two growing seasons. Under terms of the agreements, FSB provided funds to the farms and CPS provided chemicals, seed, fertilizer and services to support the operations of the farms for each respective year. According to the complaint, FSB had a first-priority lien on the farm’ crop proceeds. After the FSB loans were paid off in full for a given year, proceeds could be applied to debt owed to CPS.
But the bank alleges that Louisiana farmer Thomas Dickerson, who had an ownership stake in the farms, misrepresented 11 checks made out to FSB as proceeds collected from the 2014 crop. Because FSB’s loans for the 2014 crop year had already been paid off, an FSB loan officer signed those checks, worth a total of $1,436,312.78, to CPS per terms of the inter-creditor agreements.
But bank officials say they discovered earlier this year that those checks actually represented proceeds from the 2015 crop year, for which FSB was still owed repayment before any proceeds were to be signed over to CPS.
FSB is now seeking to recoup the $1,436,312.78 from CPS, as well as interest and court costs.