Third of three stories.

With the Jan.18 closing of Tarboro-based farm tractor manufacturer Farmtrac North America (FNA), the loyalties and livelihoods of plant workers, retail dealers and customers are slowly and surely being plowed under.

The timeframe may differ for each party but the outcome is the same: after a once-reputable company was financially gutted, corporate machinery tied to it has systematically begun tilling Farmtrac loyalists into the soil.

The January closing of Farmtrac's assembly plant and headquarters at 111 Fairview Drive and late February court-appointed receivership are only two benchmarks of the firm's demise. Receivership is a measure taken only when a company cannot afford filing bankruptcy.

According to court documents, Farmtrac owes more than $55 million in total liabilities.

Not long ago, Farmtrac boasted of very different numbers: investment of $6.5 million into assembly plant upgrades in 2005 and 2006, a commitment of $2 million to $3 million annually into continued facility improvement, reported revenues of $22 million during the first quarter of 2006 and claims of steadily increasing tractor sales.

From external appearances, it was far from a picture of a company in financial peril.

Created by North Carolina native William Redden Long II in 1941, Long Manufacturing prided itself on high quality tractors and dependable customer service.

Led by Long into the 1980s, the firm's name changed to Long Agribusiness before Escorts Ltd., of Faribad, India became the tractor firm's parent company in 2005 and rebranded the product Farmtrac.

During the transition, several persons of Asian decent held three of the top executive positions at Farmtrac, including Marketing Head Shenu Agarwal, Sales Head Sushil Kaul and a revolving door of company presidents in Vijay Raina, Vinay Upadhyay and Pranab Ghosal.

Farmtrac retained a substantial product but retailers across the country noticed a difference in attitude toward customer service and operations.

"If it wasn't about sales, they didn't want anything to do with you," said former Midwest Territory Manager David Petri.

During a visit to Green Acres Tractor, owner Kirk Wilson of Brooksville, Fla., described the actions of past Farmtrac President Vinay Upadhyay and sales manager Sushil Kaul as "rude" and "they had no clue about America customs – like service or warranties." The two were quickly dispatched from Wilson's property.

Others gained similar opinions of the Indian leaders' decorum. During one of three inquiries into purchasing Farmtrac North America, Montana Tractor Vice President Ted Wade took offense to "being snubbed" by Farmtrac and Escorts executives after making what Wade deemed was a reasonable offer. The Montana leader couldn't believe "how rude, arrogant they were about it."

More detrimental than lacking social grace, Farmtrac's top personnel proved unsuccessful at keeping company finances in check. Court documents state that by September, parent company Escorts had to make "numerous reassurances" that it would "fulfill its [financial] obligations" to pay on a six million dollar credit line with South Korean tractor and parts manufacturer LS Cable.

Escorts pushed to "induce LS Cable to increase Farmtrac's credit line ... from $6 million to $12 million." The extension was granted and by mid-2007 Farmtrac owed $8,440,230 for tractors $58,657 in parts plus interest. On Nov. 25, the Korean supplier filed suit against Farmtrac in Edgecombe County Superior Court.

An all-too-familiar scenario – with even higher stakes – played out with Alpharetta, Ga.-based lending institution Textron Financial, who extended more than $11 million in Asset Based Lending funds for Farmtrac to operate daily business and more than $43 million as a banker of floor plan tractors to retail dealerships.

Farmtrac failed to pay on either Textron account. Like LS Cable, Textron launched a suit in Edgecombe County Superior Court last November.

Retailers and customers were also being shorted on pay or reimbursements. Unprocessed sales bonuses, warranty claims and rebates were all in a sea of paperwork Farmtrac receiver James C. Marrow, a Tarboro attorney, said it "apparently hadn't been taken care of for years."

Dealerships have essentially been eating warranty parts and labor costs as far back as 2005 – another method of funds retention by Farmtrac.

An aggressive clearance Not-Even-Zero (NEZ) program designed by Agarwal further revved up incoming cash flow. Farmtrac's claim to "pay your interest and more" through semi-annual customer reimbursements that exceeded each tractor's monthly interest rate.

Many retailers like Oxford dealer Billy Yeargin were uncomfortable with the Not-Even-Zero program and didn't recommend it to anyone. "It amounted to a scam," Yeargin said. Dealers offered customers a less-risky alternate plan. Buyers are considered low-priority unsecured creditors by receivership laws and have little chance for reimbursement.

Court documents state that $2.9 million in rebates remain unpaid to NEZ customers.

Another group who helped built Farmtrac through years of sweat and dedication – company employees ñ were also gypped. After the unannounced closing of Farmtrac headquarters, $308,802 worth of unpaid accrued vacation was no longer available for employee usage. Agarwal also confirmed that Farmtrac did not have adequate funding to continue company health care into February.

So why did debts to customers, employees, dealers and a myriad of external creditors go unpaid from a company whose funds was flowing in one direction ñ inbound?

"It stinks," said Nancy Krone of San Augustine, Texas, a Not-Even-Zero victim. "And it has the odor of a mini-Enron."

Krone and many others believe Farmtrac was financially gutted; internally stripped of its assets and left with all its debts in a fashion similar to larger corporations like Houston-based Enron Power and California's Pacific Gas and Electric.

Marrow also believes that corporate raiding occurred.

"It looks like they took the money and ran – back to India," Marrow said.

Oakboro Tractors proprietor Joel Thomas supplied a different and more extended take: the money wasn't carried to India, it was sent via wire.

Since Farmtrac does business in 25 states across the U.S., the nonpayment of Not-Even-Zero victims falls under federal jurisdiction.

Missouri Sen. Christopher S. "Kit" Bond of the congressional Small Business Committee responded to customer and dealer notification last week. A fax stated Bond has taken steps to initiate a congressional inquiry by the Federal Trade Commission.

A topic of intense discussion among Farmtrac retailers was the hyper-loading of tractors onto dealer lots, which continues to pull many dealers into an economic sinkhole.

Petri said the move was an all-out blitz, as Ghosal and Kaul told sales managers last fall to "Do whatever you have to. Get these tractors off our lots."

Some dealers ended up with two to three times their approved credit limit.

Smooth sales phrases from Territory Managers like "just hold this one for a few days" and "we're just creating some storage" followed by reassurance of no interest or curtailments were the type of con game Thomas and others bit on. His $300,000 approved credit line ballooned to almost $1 million worth of debt.

Many believe a link may exist between the company's last weeks and a shift of financial liability onto unsuspecting Farmtrac retailers.

"Nobody's kidding anyone, they both [Textron Financial and Farmtrac] knew what they were doing," Thomas said, of the act being a choreographed business move.

According to a reliable source, Textron Financial maintains daily updates on borrower status.

"It's a way [for Textron] to turn bad Farmtrac debt into good dealer debt," said Kallyn Wells, a dealer in central Florida. With more than 2,800 tractors on dealer lots across the United States and Canada, Textron has a secured form of payment, whether by collecting curtailments or lawsuits.

More than 950 units remain on the Tarboro manufacturing grounds.

Textron Financial Corp. Division President Scott Raymond declined to comment and Public Relations person Rachelle Sackut accepted questions by telephone conversation but had no comment on questions specific to the Farmtrac account.

North American Equipment Dealers Association (NAEDA) attorney David E. Shay of Kansas City, who provides legal counsel for 25 to 350 clients tied to the Farmtrac situation, spoke confidently about the prospect of a collaborative effort.

"Just look at the court documents. It's all there."

One item that's missing: excerpts from dealers that received unordered tractors from shippers who attempted to frequent push units onto retailers throughout the dealer network. Desperate to dump product, Thomas said former Territory Manager Glen Davis once "used his own truck to pull a trailer" to drop off unordered tractors.

Davis had no comment.

Farmtrac retailer Tim Cooke, owner of Two Rivers Inc. of Drakesboro, Ky., said that large corporate law firms could use stall tactics by filing copious motions and continuances.

"Large companies are capable of winning [law suits] by attrition. They can make a case last until everyone [the plaintiffs] has died," Cooke said.

E-mails from Farmtrac Engineering Head Tony Pearce in early June discussed recent headquarters activities. Pearce stated that about 250 tractors would be assembled and readied for a liquidation sale. Receiver Assistant Doug Gurkins is "planning for the liquidation ... for all tractors, service parts, raw materials, equipment and real estate."

Dealers and customers agree that protecting domestic businesses from foreign exploitation is an escalating concern – and the Farmtrac situation is only the tip of an iceberg.

Regarding the design of present statutes, Marrow said, "There's not much you can do."

It is extremely difficult to hold foreign-based businesses accountable through the standing criminal justice system. Dealers and customers suggest closer departmental and statutory regulations.

"If we fail to act," Wilson said, "it will happen again."

Another group of U.S. workers, consumers and businesses will get plowed under.