Trickling Springs Creamery Business Collapse

[ken_sylvania]

I’m really sorry this is happening, especially for the investors whose trust was taken advantage of and for the employees who are loosing their jobs.

I hope the court forces reorganization on the company, giving the investors the equity in the business. Maybe they can save the business and ultimately preserve the jobs and make the investors whole.

J.M.

I question whether that would be possible without another infusion of cash. And borrowing (and spending) too much money is what took this thing down in the first place.

[Signtist]

Hmmm, unless I have some wires crossed, at least one of the individuals under investigation has a background in accounting. That’s fascinating.

[Judas Maccabeus]

I’m really sorry this is happening, especially for the investors whose trust was taken advantage of and for the employees who are loosing their jobs.

I hope the court forces reorganization on the company, giving the investors the equity in the business. Maybe they can save the business and ultimately preserve the jobs and make the investors whole.

J.M.

I question whether that would be possible without another infusion of cash. And borrowing (and spending) too much money is what took this thing down in the first place.

Other than operating cash, this would convert all the lien holders into stockholders, current owners get nothing. My father owned stock that was created in this manner. It involved a bankruptcy filing.

J.M.

[temporal1]

This is yet another example of Mennonites (and possibly others) being taken in by some non-conventional investment scheme, and losing. It seems clear that millions of dollars of investors' money may have been lost. You have to wonder when people will ever learn.

That was my same thought when I learned of this a month or so ago.
How can there be scandal after scandal, with people brokering other people's money, and and think that they can somehow get around the laws?

It seems that "success" goes to people's heads, and they can't believe they are capable of failing.
Somebody who was looked up to as a good businessman got caught up in this and lost his church membership.
I'm glad that at least some CA churches still believe that good stewardship of finances is a Christian virtue and that church discipline is in order if one is not accountable and transparent with his brothers in the Lord, and that handling money illegally is considered worthy of church discipline.

Peer pressure, “everyone’s doing it,” “just this once,” “no one will notice,” “it feels good, it’s fun,” etc., are not problems isolated to children and young people! - Adults are hard-vexed with all of them, with far less empathy when revealed. The prices of sins+crimes are high.

Since 2008, so many Illinois businesses, small+big, some of decades, closed, many due to financial schemes and too much debt. Not all closures were due to criminal activity, but poor stewardship is probably 100%. It’s not over, more closures continuing.

Painful. Painful just to read about.

Sin
http://forum.mennonet.com/viewtopic.php?f=5&t=2383

[mike]

I hope the court forces reorganization on the company, giving the investors the equity in the business. Maybe they can save the business and ultimately preserve the jobs and make the investors whole.

J.M.

I question whether that would be possible without another infusion of cash. And borrowing (and spending) too much money is what took this thing down in the first place.

Other than operating cash, this would convert all the lien holders into stockholders, current owners get nothing. My father owned stock that was created in this manner. It involved a bankruptcy filing.

J.M.

If the business model were profitable outside the borrowing/investment irregularities, something like this might make sense. But it likely is not.

[Josh]

A business this large should be going through a bankruptcy proceeding - I would be surprised if the creditors didn’t demand it, even if it’s just a Chapter 7.

[ken_sylvania]

I question whether that would be possible without another infusion of cash. And borrowing (and spending) too much money is what took this thing down in the first place.

Other than operating cash, this would convert all the lien holders into stockholders, current owners get nothing. My father owned stock that was created in this manner. It involved a bankruptcy filing.

J.M.

If the business model were profitable outside the borrowing/investment irregularities, something like this might make sense. But it likely is not.

That's just it. I don't really think the collapse was caused by the owners siphoning money out of the business, although that might be a part of it. It seems that spending all those millions on a modern cheese processing plant was perhaps a really bad idea. It is just so easy to spend OPM. The business was kept running for a number of years by continuing to borrow from unsuspecting individuals who trusted Riehl (and others). When incoming cash gave out the business couldn't keep going even though it wasn't paying any of the individual investors back. I can't say how the bank loans were being handled, if there were any.

[ken_sylvania]

A business this large should be going through a bankruptcy proceeding - I would be surprised if the creditors didn’t demand it, even if it’s just a Chapter 7.

That might depend on who the creditors are. If there are no large sums owed to banks or other non-Anabaptist people, I doubt it will.

[mike]

That's just it. I don't really think the collapse was caused by the owners siphoning money out of the business, although that might be a part of it. It seems that spending all those millions on a modern cheese processing plant was perhaps a really bad idea. It is just so easy to spend OPM. The business was kept running for a number of years by continuing to borrow from unsuspecting individuals who trusted Riehl (and others). When incoming cash gave out the business couldn't keep going even though it wasn't paying any of the individual investors back. I can't say how the bank loans were being handled, if there were any.

If a business that has been in existence for 15 years is going around offering the chance to invest money at 5%, the first question would be why they aren't borrowing from a bank. For reasons of convenience, if nothing else. I can't imagine tracking repayments to hundreds of lenders. There should have been all kinds of red flags.

I am aware of storage shed rent to own companies which frequently offer the opportunity to invest at higher interest rates even than 5%. An organization I am on the board of did that with a building fund and it worked out just fine. But that industry has a proven business model and a track record of success.

However all these kinds of investments, which are appealing because savings accounts have poor rates of return, involve risk. Buyers who do not use common sense and who do not care enough to know and understand the financials of the organization deserve some of what they get.

[Ernie]

However all these kinds of investments, which are appealing because savings accounts have poor rates of return, involve risk. Buyers who do not use common sense and who do not care enough to know and understand the financials of the organization deserve some of what they get.

One man who was a successful small businessman lost money in this ordeal said, "I knew better. I should have known that I should not lend money to a broker who was not providing reports of how the money was being used. I should have invested my money with an organization like AF this is legal. But my desire for that extra 1% is what made me invest in them instead of AF."

The Bible says the love of money is the root of all evil.
I wonder if there isn't a Satanic element to this in which Satan actually blinds the minds of some otherwise thoughtful and astute people.