Hansen-Mueller Co. enters chapter 11 bankruptcy
Nebraska-based grain dealer Hansen-Mueller Co. has filed for bankruptcy following a string of financial challenges. Headquartered in Omaha, Hansen-Mueller Co. is a nationwide merchandiser and processor of grain with a diversified agribusiness platform with locations throughout the central United States. It operates nine elevators, four port terminals, and an oats processing facility. Hansen-Mueller Co. also leases and operates grain trading offices across the Midwest. In October of last year, the Nebraska Public Service Commission temporarily suspended the company’s grain license after an investigation revealed that Hansen-Mueller had not paid 38 Nebraska producers for grain sold to the company. The debt, accumulated between Aug. 30, 2024, and October 2025, amounted to almost $2 million.
The corporation announced its plans to restructure its finances in mid-November of 2025 and is now well underway in the bankruptcy proceedings. According to its press release, Hansen-Mueller Co. voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code on Nov. 17. The Nebraska Public Service Commission restored Hansen-Mueller’s grain-dealing license after receiving assurances that the company had paid its debts to producers. As part of their agreement, the company must pay its other outstanding debts by Feb. 27 of this year.
Adam Hoesing, a former attorney and assistant professor of law at Chadron State College, offered some insight as to what the bankruptcy proceedings may look like going forward. In a Chapter 11 bankruptcy, also known as a reorganization bankruptcy, debtors have the opportunity manage their own assets rather than appoint a trustee. The debtor must submit a plan of reorganization for approval by the creditors specifying the steps they will take to cure their default. Under Hansen-Mueller Co.’s plan, it will operate as a debtor in possession and manage its own operations in the ordinary course of business to satisfy its financial obligations. This gives the company some freedom in the path its directors choose to cure the default as well as keep the business operational. “What I believe this company’s trying to do, which can happen, is a structured reorganization. When they get to be debtor-in-possession they can sell assets in a manner that is feasible for maximum return on their value so as many people as possible are able to be paid.”
Most of Hansen-Mueller Co.’s assets were sold in late December through a court-supervised sale. Under Section 363 of the U.S. Bankruptcy Code, this process should attract buyers who can continue the business operations and provide a high return to creditors. Josh Hansen, chief executive officer of Hansen-Mueller Co., said that the board of directors deemed this process the most effective and efficient way to orderly arrange the sale of their assets. “We believe this path will maximize the value of the company’s assets for the benefit of our creditors, employees, and all stakeholders.”
SALE PREVENTED
Hansen-Mueller Co. has run into a few hiccups along the way, though. A week before the asset sale occurred, 11 farmers from Texas filed an emergency motion to prevent the sale. They claimed that Hansen-Mueller owed them roughly $1.4 million dollars for grain deliveries made earlier in the year. Under Section 557 of the U.S. Bankruptcy Code, farmers in grain-producer cases can utilize special expedited procedures to seek relief. They argued that their grain proceeds were being used by Hansen-Mueller as operating cash without providing them with adequate protection. They feared that their proceeds were at risk of being swept by BMO Bank, a secured lender, unless procedures were implemented to protect their funds. Hansen-Mueller is working to negotiate a solution with this group, and the bankruptcy court agreed to postpone further hearing on their objection to the sale hearing.
Also excluded from the asset sale were the corn delivery contracts of Nebraska farmer Brian Schafer. Despite Hansen-Mueller Co.’s assurances to the Nebraska Public Service Commission that all producer debts had been satisfied, they still owe Schafer around $492,000 for over 102,000 bushels of corn he delivered before the bankruptcy filing. Due to a misunderstanding, he was not among the 38 Nebraska farmers that Hansen-Mueller paid to have their license restored. Schafer also still has contracts with Hansen-Mueller to deliver nearly 1 million bushels of corn by the end of 2026, which he has asked the court to void by declaring them non-executory contracts. An executory contract is one in which both parties have continuing obligations at the time bankruptcy is filed, and Schafer argues that this is no longer the case due to the missing payments. As for the money owed to him, the Nebraska Public Service Commission is exploring possible avenues to rectify the issue. One potential course of action is using Hansen-Mueller Co.’s $1 million security bond to satisfy the debt. As part of their extension with the Nebraska Public Service Commission, they have to post a bond. This means that a third party agrees to pay a client’s obligations if they default. It’s important to note that this bond is not insurance, but rather an assurance of payment. A performance bond holder can sue their underlying client if default occurs in situations like this.
What does this default mean for Hansen-Mueller Co. and its agreement with the Public Service Commision? Hoesing had a few thoughts on the matter. “I think PSC is in the same position they were in before the bankruptcy. Now that the bankruptcy has been filed, some of their power has been lost. Their ability to control that license is now subject to bankruptcy court.” If they wanted to take any action against Hansen-Mueller’s license, they would have to appeal to the bankruptcy court to lift the automatic stay that prevents creditors from pursuing most collection activities in a bankruptcy proceeding. “I suppose the Public Service Commission could declare default of their deal,” said Hoesing. “That would be the natural consequence.” Hansen-Mueller Co. could potentially face administrative fines or sanctions, or even have their license pulled as a result. “If they have their license pulled, then their ability to operate as a debtor in possession is put in jeopardy. When that happens, then you’re just talking about assets that need to be sold at this point. Or as a debtor in possession they have an obligation to pay all post-petition debts as they come due.” Hoesing explained that buying and selling grain is a post-petition obligation, and a debtor in possession that doesn’t honor post-petition obligations can be removed and have a trustee appointed.
This would be a less-than-ideal scenario for Hansen-Mueller Co., as the goal is to keep operating as a debtor-in-possession. “What they’re trying to do now is try to operate until they can find a good price,” said Hoesing. While things are uncertain right now, Hansen-Mueller Co. is working with the Nebraska Public Service Commission and the U.S. Bankruptcy Court to find a solution. Going forward, Hansen-Muller said it intends to meet its obligations “to employees and key suppliers” for goods and services. Further case information, including court filings and claims information, can be found at the company’s restructuring website, managed by its claims agent, Epiq, at https://dm.epiq11.com/HansenMueller.
