auction - what would you do?

Sheriff's auction a few hours earlier today.

I couldn't go, but a friend of mine went, filled me in on how it went:

Some local farmer, old guy, been farming all his life, started having a hard time making ends meet and got into a bind.

Hired a lawyer to get him through bankruptcy, apparently the lawyer was charging quite a fee for his services, and the guy couldn't keep paying him either.

Lawyer took possession of all his old tractors and is having them auctioned off.

The farmer was there with his family - all begging people not to bid on anything.

He was crying and on the phone with yet another lawyer trying to stop that auction, but the auctioneer didn't care, the show must go on.

On top of everything else, the local trucking company that delivered all the tractors to where they are now, set the minimum bid for everything to cover THEIR transportation fees of about $1200 PER tractor (for the 15 mile ride)

Auction started and of course people immediately started bidding.

John Deere 720 diesel - great shape - went for about $2600. Probably one of the best deals of the day.

But...

Can't say I would have bid if a man and his family begged me not to.

I know it's already too late for the guy - I get how it all works. He has an obligation to pay what he owes - I get it.

And I get that if I didn't, somebody else would, so I might as well. I understand all that.

I'd have loved that 720 myself for $2600.

But, I can't say there's anything in this world that I need to possesss badly enough to turn a blind eye to a man in that spot, and hope to get his stuff cheap.

Im with you on that one JR. I just cant take advantage of someone else bad luck and hard times.

If I knew the situation, I wouldn't have gone. That being said, I can't believe that enough out of town strangers that don't care about him, didn't show up to bid stuff up to a going price. I know a half dozen people that would buy no matter what the circumstances..

I can understand completely and would not of bid knowing the situation , BUT one must realize that in filing bankruptcy the farmer more than likely got out of paying someone he owed or lots of people he owed money to. May have been lots more than the value of all his tractors put together. Who knows the complete story? In bankruptcy , someone is gonna lose! How much did he owe? Lots of unknowns here. Can't expect total strangers at the sale to have much sympathy either. Who knows, he may have walked away from a $200,000 debt just for giving up $50,000 of assets. Who knows. I feel sorry for him but maybe he just let this thing go too many years. Ya got ta know when to hold and know when to fold. Sad deal all around.

Can't comment on the overall situation, because we don't have enough information (how much was the fee, how much forebearance had been given by attorney, etc.- there are remedies for such situations, but pretty much need to know all the facts to determine whether the process was fair).

BUT- the technique of asking everybody not to bid is just the opposite of what Farmer should have done- because lawyer has a judgment, and will keep selling stuff until its satisfied- so the MORE he gets per item, the less that has to be sold to pay off the debt. If the old farmer was smart, he would have been out there in the ring, talking up each item and telling how good it is, and encouraging the bidding. I'd be willing to bet that JD would have brought double, had bidders not been made to feel guilty about bidding.

There were a couple of movies about farm foreclosures in the crash of the early 80's, and the low-ball bidding was always part of it. It made no sense- the bank would have bid up to its opinion of value of the item, and then either acquired it, or not- and again, the less that is bid, the more that has to be sold to pay the debt.

I guess my question is, what does he gain by people not bidding? They aren't his anymore.

At many forclosure auctions like that friends, neighbors and family intentionally pay too much for items to secretly help the family out.

I feel for the poor guy, he still believed he could stop it that late in time. Situations like that are a burden for everyone. It was against his own interest by discourage bidding, but refusing to accepting reality may be how he got into that situation.

No, I would not have made a bid either. Friends and family and community are more important than things.

I know. I guess he was hoping to get them back through more legal wrangling with another lawyer.

Again - I totally understand that the guy's probably a lost cause, and it'd be to his benefit for the prices to go crazy high.

But still - If an old man pleaded with me not to bid on his stuff - to me all common sense would just be put on hold, and I wouldn't bid.

And not saying I'm right and anybody who bid is wrong - I just personally couldn't ever be comfortable driving a tractor I picked up that way.

I think if I bought it real cheap, I'd have to give it back to the guy to feel better about myself.

Again - I don't know the man - might be the biggest )(#$#$ this side of the mississippi for all I know.

Just curious to hear other's opinions.

Depends on the situation I guess.

Nothing good about the deal, so nothing to feel good about.

If the fella had medical problems, then I'd sure feel real bad for him.

Otherwise, Established farmer, these last 4 years, sure is hard to go broke as things are, you have to try hard to not make it farming.

Did it get drank away, or at a casino, or what happened?

Would feel sorry, but not feel like lending changing my ways to a fella that happened to. I mean, down on his luck, and would hope he can find a better path, certainly not dancing on his misfortune! But, here he woulda made his bed, and he's got to own up to it, I wouldn't alter my life to allow him to basically step on others....

Without knowing the story, how's a fella to make a judgement call like that? So I would just have to care about me and mine with the info given, and act with honesty and my own considerations in such a case.

In any event, we are not supposed to judge, even if we know the story, so.... This is a legal auction, it appears some debts were not paid, and the stuff is at legal auction, it would not be moral to stick it to the debt holders any more than it would be moral to look down upon the fella.....

So, to be moral and non judge mental, one should go to the legal auction and do what you normally would do at any other auction, bid on stuff you wanted to buy up to the price you planned to pay.

Anything else is unfairly judging, and trying to referee the case on your own without being party to all the facts....

Now again, that doesn't mean I'd be happy to stomp on the guy, and sure seems like others were taking advantage of the fella, and whether its judging or not sure would matter to me why he is in the situation he is in....

But, what really is moral there, if you change your actions, are you really following the moral path, or are you just shafting/ rewarding someone else?

Paul

My father and my uncle had farms next door to each other while I was young. Dad was tight with his cash, didn't spend a dime that didn't need to be spent. He also owned a fairly successful off farm business. My uncle was the epitome of easy come easy go. When the '80's knocked the wind out of farming, Uncle Pete's habits caught up with him. It was rough watching family losing what they'd worked to aquire. Some of the family stood at the end of the driveway on auction day and tried to discourage everyone from going to the sale. Some of us walked over and watched what went on. Dad just stood there with a sad look on his face.

Anyway, the sale went on. A local Dr with deep pockets bought the place. 10 years later, it was a subdivision. I can't count the times dad said he wished he'd have took his hands out of his pockets and bought the farm, if not all the equipment too. In the end, it would have been a little easier to swallow if someone who at least had some appreciation for the farm had ended up with it. Bottom line, it was gonna sell, like it or not. Saddest part, the place sold for about 60% of what it was worth then. Equipment went for pennies on the dollar. My uncle ended up having a stroke and dying 2 years later. The fact the place didn't sell for a decent price only helped the Dr, and ended up being yet another sad story for my aunt and uncle.

Looking back now, the entire family would have felt a little better if the place didn't leave the family as a lost cause that wasn't worth what we thought it was. Not saying things would have been any better if it went for big money, just sayin....

The movie 'County' with Jessica Lange was about the 1980s and such an auction in it. A pretty good movie mostly, did show a lot of how those days were.

We may likely return to such a time if/ when the farm economy goes bad again.

I attended a lot of those auctions in the 1980s, one right across the road from me, later the auctioneer said how it worked, first few items sold too cheap and they were worried, then things did ok and the last 4 big items didnt have to sell, they bid them through but were bought back. The neighbor raised enough money to pay the bills and by keeping the bigger items he was able to keep farming. Eventually they still went under, but for that year, that auction saved them. Now if the neighbors had not bid on stuff, then everything woulda been sold, and all done, farm woulda been gone too.

The auctioneer was telling me about this in the early 2000s, but I figured out which auction he was reminiscing on, don't think he realized I would figure it out.... I am to understand a lot of auctions were held that way.

Went to another one 2 miles down the road, they couldn't give iron away there in the 1980s. Was real sad to see it that way, too.

Went to many of those 1980s auctions, probably 10 a year there for a stretch. Wasn't happy times.

I can understand not wanting to buy a tractor that way and not bidding. I get it.

Don't know if that's actually the right call or not, morally - as long as that is the question.

Paul

I would guess there is a WHOLE lot more to the story than what you had heard. Don't know that I feel too sorry for the guy.

That reminds me of what I heard about from the Great Depression. Some guys got rich off other peoples' misery, including land sales. May they rest in peace.

Why did not the father take a mortgage on the place far ahead of an auction and dictate to the uncle how to run the farm.

Just a couple of comments: No one could have pursuaded your uncle to do anything different until it was too late. My brother has a sayng: "It's hard to have sympathy for anyone who's problems are self-inflicted".

Trying to discourage anyone from bidding worked against him. The selling prices were lower - and the farmer didn't understand that the bankruptcy didn't cover the attorney's fees so he's still liable for the unpaid balance, whether the attorney's fee was excessive or not.

Apparently the farmer is an "easy mark" for other people, including his attorney. He probably never will wise up.

My Dad was pretty tight all his life, and in the 80's he quit farming with his brother since Dad bought a larger farm about 20 miles away and we moved. His brother raised lots of pigs and had a half section of land he was buying. His banker told him that he could build a new house in the summer of '82, so they got everything together and got it all framed up before winter hit. Many times my Uncle went in to the bank to get the loan finalized, but there was always something they were waiting on. Well, the new year rang in and interest rates shot through the roof.

By the time the loan was finalized his interest rates were up 10%, all due to the banker putting everything off that fall. My Uncle was sold out 3 years later all because of that new house.

As the years have progressed, one of my Uncles sons committed suicide, and the other 3 boys have all moved from the area. My Uncle has went a little senile and blames my Dad for buying some things on his auction, as well as things Dad has had from their Father's auction back in the 70's. It split the family up and I know my Dad is hurting. He bought back some things that were Grandpa's on the Uncle's sale...

Sorry for the long post.

Kinda sounds like some people I know. Had about a thousand acres given to them by his dad to farm, brother got mad and sued for his share of the inheritance. They were already having money troubles and it was in the early 80's. They ended up declaring bankruptcy, but kept the farm and still live on it. Now he has some health problems, so in order to keep the farm they didn't put it in a trust, they signed it over to 2 of the 9 children. Ends up one of them gets divorced and now half of the farm is in legal dispute. It also happens this same kid had a tornado take out his house 5 years ago, hailstorm wiped him out a few years later, and now since a hailstorm mangled his parents place last year his insurance is saying he has too many claims and dropped him. These people are generally salt of the earth, but they listen to the goofiest ideas and put themselves in some awful difficult spots combined with some bad luck it just keeps them down.

JR,
How about looking at the story from 180 degrees.

He has been farming his whole life, a few poor decisions here and there. Add those up over many years. Farmer is now in a bind.

You are a creditor, he owes you $100,000. Is the story still sad, do you make your decision based on facts? He does owe you $100,000, or do you make your decision based on emotion? He is crying and sad, that should be worth a lot right?

My answer, no. He owes you something he promised to pay back, by signing his name on the dotted line he in directly agreed to that auction if he did not hold up his end of the deal. Well, he agreed to the terms of the note, the auction is really an after the fact event.

Do I think the story is sad, you bet I do. I have seen others in similar situations. Sometimes people are not good business people, maybe he should have cut back early on, instead of hoping for a better harvest each year or cheaper inputs.

Since the crash of October 2007, I have added a fair amount more equipment to my place. Lots of people getting out even of the bigger farmettes. They ask a price, I counter, we go back and forth. If I get it at a price I want I buy. I can see these people are struggling, but they need to unload all of their "gotta have" purchases that looked good in 2004, but no so much in 2009. But, in no way is it my fault they overextended themselves.

Rick

The thing that's puzzling is the implication that the lender is at the mercy of what stuff sells for to third parties at the auction. I worked for PCA at that time, and that simply isn't true. The creditor (bank or PCA) can bid up to the amount owed on anything they want. We (well, I) always figured out how much we were willing to bid on each item, based on what we thought we could resell it for. We would bid it up to that amount, and either buy it (for that amount or less) or let it go and get our money out of it. We would rather someone else outbid us so we didn't have to deal with reselling the item, but were perfectly willing to go either way. And either way, the more that gets bid, the less the debtor ends up owing, and the better it is for him. I just can't think of any scenario where it was to the farmer's advantage to encourage no one to bid.

Although I don't know the specifics, it sure sounds like a case where a guy doesn't take care of small problems before they become big ones. Smart businessmen declare bankruptcy before they're flat broke.

I don't get where he got off asking people not to bid on "his" equipment. Sounds like it was no longer his.

Sounds like a bunch of jackasses live around that area.

I bought this combine from a dealer that got shut down by CIH in the late 90's. I had the combine for less than one season, I bought it in October and had a year warranty on everything. Guess what? The 3208 self destructed and was leaving a white jetstream behind it when I was combining corn.

I called up the dealer, he brought it back and put another engine in it. I had to deal with 400 acres of standing corn. After I got it back a couple weeks later, luckily I had my old machine and didn't trade it I finished harvest.

That winter CIH shut him down. He was in jail for a couple years, but is a good guy. I had to go to court because he didn't tell his bankers that it was a warranty job. He cooked the books. Luckily, eventually they dropped the court case. Sometimes you get caught up in other peoples business too. Probably doesn't fit here, but dealers have issues too sometimes. I got rid of that yellow machine before the next harvest. No more warranty..

Bankruptcy means he owed money and took legal steps to get out of paying it. Hard to feel too sorry for him - his pain was self-inflicted for getting in too deep.

These are my thoughts and I realize there are exceptions-----In a bankruptcy case an innocent person, the lender, supplier, etc, loses the money.

Everyone doesn't think alike. I had a "friend", now deceased, who loved a situation like you describe. I went to visit him on Wednesday before he died on Friday, and he was absolutely delighted that his neighbor up the road a mile was losing his place. Basicly on his death bed, and this sad situation seemed to be the highlight of his life. It was all he wanted to talk about. His illness was secondary. I was astonished and ashamed. He was a deacon in our local Baptist church. What an example of Christianity. If he'd been able, he would have been at his neighbors auction, bidding like a madman. I remember a few years earlier, bringing him home from the hospital the day his wife died. We hadn't driven a mile from her death site before he was trying to figure out how to shyst a sick neighbor out of a nice John Deere and a big disk. Bad memories. He was the perfect example of how NOT to be concerning friendships, neighbors, and Christian principles. Does God strike us down when we get rotten to the core? I can't help but wonder. . .

There has to be more to the story. It sounds like the farmer was able to keep his equipment after going through bankruptcy, but failed to learn anything, and lost his equipment to cover legal expenses. The lawyer would have had to get a judgement against the farmer to take the equipment. The time to fight it was when the lawyer was trying to get the judgement, not the day of the sale.
Bankruptcy judges appoint lawyers to be a trustee and dispose of assets, often at auction, to cover some of the bankrupt party's debts. That is probably what happened. I agree with the others that it would have been in the farmer's best interest for the equipment to sell for the highest amount possible.
It's a sad situation for the farmer, but he should have realized the risk of using credit. I certainly feel bad for the guy, but I wouldn't have had a problem bidding on the creditor's equipment. It no longer belonged to the farmer anyway.
And to say the auctioneer didn't care probably isn't accurate. The auctioneer's hands were tied. He would have been in violation of his contract with the seller if he had not held the sale.

I know exactly what you mean about interest rates in the Ronald Reagan 1980"s. I built my house in 1984 and all I could get was a varable interest rate of 13%!! Compare that to the 2-4% rates of today!!!!!

There is a few cases of that around here, hire a lawyer to help with a legal situation and the lawyer ends up wiping you out worse than the original problem.

The only way encouraging people not to bid would have been to the farmer's advantage is if the lawyer took the equipment in lieu of payment, I'd think.

Then the lawyer would be stuck with whatever he could get out of the equipment, minus the transport fees from the crooked trucker.

Still it was probably all emotionally driven. He just plain didn't want to lose his equipment this way.