Cotton Merchant Paul Ryan Hart Seeks Bankruptcy Protection
On Wednesday, Paul Hart, a big cotton trader in the United States, sought bankruptcy protection because of losses in the futures market.
The Paul rink Hart company in Dezhou is regarded as the largest seller of organic cotton in the world, and the fourth largest cotton producer in the United States. The company's annual sales volume was $580 million in the financial year ended June 30th.
However, the company reported liabilities between $1000001 and $500 million, and the company presented the debt and the same amount of assets to the US bankruptcy court.
According to people familiar with the matter, the ICE cotton futures price reached its peak in early March, and the margin increased. But Hart failed to raise funds and turned over to the additional margin.
In the late February and early March, due to a lot of speculation, ICE cotton futures were volatile, leading futures market managers - Commodity Futures Trading Commission to investigate.
ICE expanded the trading limit zone and raised the margin in turbulent times.
Many commercial entities, such as Ryan Hart, are forced to buy back their short hedge as a result of margin raising.
In March 3rd, cotton was closed at 95.53 cents in December, but in September 15th, the price dropped to 62.13 cents.
According to the documents submitted to the court, although Hart successfully avoided a complete collapse during the period, he suffered huge losses and unable to recover completely.
The company's reputation was damaged and was forced into a debt repayment period in April 2008.
According to the court documents, Hart won a bid from a competitor and was willing to acquire a large portion of his assets and intend to undertake all the buying obligations of cotton futures, but the lender refused to agree to the agreement.
According to court documents, Ryan Hart is a wholly owned company of Paul Hart, and is a wholly owned subsidiary of Swiss Corporation Paul Ryan Hart. It is regarded as one of the world's largest cotton traders.
The company's top creditors include CoMark company, Heaton Cotton Corp, Caney Valley Cotton Corp, and several cotton processors.
The law firm Munsch Hardt Kopf & Harr will represent Hart in bankruptcy proceedings.
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