Minnesota Supreme Court to decide fate of CVEC-GPC suit

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Many members in the bitter legal battle between two local cooperatives are hoping the Minnesota Supreme Court’s hearing of the case Jan. 3 between the Chippewa Valley Ethanol Company (CVEC) and Glacial Plains Cooperative will be the end of the road.

It could take several months before the Court’s opinion is released.

Since 2009, the case has gone from the Swift County 8th Judicial District courtroom in Benson, to the Minnesota Court of Appeals, and now finally to the state’s highest court. At both the local and Court of Appeals Glacial Plains won. That has not deterred CVEC’s board from continuing to pursue its cause.

At issue is whether or not CVEC is required to perpetually buy its corn from Glacial Plains Cooperative (GPC) or if it can terminate a contract of indefinite length with reasonable notice. Glacial Plains has claimed that its contract for corn supply signed in 1994 gives it perpetual and exclusive right to deliver the corn the facility uses to make ethanol.

As CVEC was pursuing financial support for construction of an ethanol plant west of Benson in 1994, it turned to what was then United Farmers Elevator for financial backing in two key ways: It would finance the construction of the grain handling facility that would supply the ethanol plant with its corn – a multi-million dollar investment. It would also put $400,000 cash into the construction of CVEC through the purchasing of 200,000 shares.

“Its assistance was essential to the speed with which CVEC was formed, if not to the very fact of its formation,” Swift County 8th Judicial District Court Judge Charles Glasrud wrote in a 2016 decision.

For that investment GPC was guaranteed exclusive grain handling rights for the ethanol plant “in perpetuity, so long as it met its contractual obligations.” CVEC started operations in 1996 with Glacial Plains supplying it with corn.

The relationship between GPC and CVEC, for the most part, worked well until 2009 when the relationship began to sour....
 

 

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