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Farm-to-fork fiasco: Alexander King Farms files for bankruptcy

SOUTHEAST WISCONSIN — It's a farm-to-fork fiasco. Back in October of 2016, FOX6's Contact 6 told people about Alexander King Farms. The farm based in Geneseo, Illinois owed its customers hundreds of thousands of dollars for meat that was never delivered after orders were placed.

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Alexander King Farm's website

Now, there's more information about whether customers will ever get their money because Alexander King Farms has filed for bankruptcy.

The farm promised its customers high-quality all-natural beef and pork, which is why Angie Brost placed an order.

"I wanted to look for a better option for feeding my kids because there are so many extra chemicals in the meat that we have now, and hormones and all of that extra stuff," Brost told Contact 6 in 2016.

She wasn't alone.

Other Wisconsin customers, like Jamie Blosmore, spent hundreds of dollars on orders to the farm through its website.

"There was a lot of great reviews on the actual website, and the cuts and selection of the different butchering options you could choose were really appealing," Blosmore told Contact 6 last year.

The orders were never fulfilled.

In September, Contact 6 caught up with the farm's owner, Beth Alexander, outside the Henry County Courthouse in Illinois. Alexander said she hoped to make things right with her customers.

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Contact 6's Jenna Sachs talks to Beth Alexander and her attorney, Justin Raver, outside the Henry County Courthouse in Illinois.

"I really appreciate everything, all the hope that they had, and the business that they gave us. I'm just so sorry that it didn't turn out different than it did," Alexander said.

Months later, Contact 6 knows exactly how much Alexander owes.

In December of 2016, Alexander filed for Chapter 12 bankruptcy. The forms within the bankruptcy filing estimate her total liabilities at $814,000 and her assets are nearly $19,000.

According to calculations conducted by Contact 6, customers and various local business associates are owed more than $350,000.

More than 200 meat orders were supposed to go to people in Wisconsin. Wisconsin customers alone are owed more than $65,000.

Most people in Wisconsin paid between $115 - $600 on orders placed with Alexander King Farms.

Some of Alexander's customers believe she's guilty of fraud.

"Just merely her saying 'I didn't intend to do it' means nothing to me," Brost said.

Alexander's attorney, Justin Raver, denied that in September of 2016.

"There no malice here. There's no intent and no deceptive practices. It's a business that failed," Raver said.

Blosmore and Brost turned to Contact 6 because they wanted their money back, but Blosmore wasn't hopeful.

"Ultimately, I'd like to get my money back. I am not confident that will happen," Blosmore said.

Marquette Bankruptcy Law professor Ralph Anzivino spoke with Contact 6 about how Chapter 12 Bankruptcy works.

"Chapter 12 is specifically created to help farmers and fishermen when they get into financial trouble," Anzivino said.  

Anzivino says in Chapter 12 proceedings a business owner lays out a three- to five-year plan to back his or her debts, but that doesn't mean everyone will be paid back.

In Alexander's filing, Raver lists her customers as "non-priority unsecured" creditors, which means they may not be paid back in full.

Anzivino disagrees with Raver's decision to categorize customers that way.

"Right now, he's trying to get the benefits of a Chapter 12, but he's trying to put those people into the unsecured category and you can't do that. Those are priority claims," Anzivino said.

Contact 6 spoke with Mary Grossman, a former Chapter 12 Trustee for the Eastern District of Wisconsin, currently serving as a Chapter 13 Trustee, who agrees with Anzivino.

In an email Grossman wrote:

"Non-priority unsecured claimants often receive nothing" and "It seems to me that the customers should have been listed as priority creditors."

The experts Contact 6 spoke with say customers should file a claim designating themselves as priority creditors even though it's a long shot.

Raver sent this email statement to Contact 6 about Alexander's bankruptcy filing:

Former clients who feel they are owed money should file a claim with the bankruptcy court. 

I have no intention of filing a chapter seven bankruptcy. It is my clients desire to proceed in a chapter 12 as we both feeling it would benefit her as well as providing some reimbursement to known creditors. 

That said, it is doubtful that creditors will receive their entire claims. Under a chapter 12 or 13 bankruptcy generally claims pare paid pro rata based on priority. And general unsecured claims are the lowest priority and therefore receive less than secured claims of priority claims (like taxes for example). 

What I can promise is that all bankruptcy procedures will be followed and the process will be fair and above board. 

In the end, a court will make the decision on how the customers will be classified, and whether the Chapter 12 bankruptcy will proceed.

Right now, the Illinois Attorney General's Office has an active investigation underway into Alexander King Farms.