Advertise in Print | Subscriptions
Published May 16, 2011, 05:00 AM

Growers seek payment for sunflowers

BISMARCK, N.D. — Farmers from across North Dakota say they’re owed money for sunflower loads to Mitchell Feeds Inc. of Hendrum, Minn. The North Dakota Public Service Commission is asking a court to declare the company insolvent, which could clear the way for access to the bond.

By: Mikkel Pates, Agweek

BISMARCK, N.D. — Farmers from across North Dakota say they’re owed money for sunflower loads to Mitchell Feeds Inc. of Hendrum, Minn. The North Dakota Public Service Commission is asking a court to declare the company insolvent, which could clear the way for access to the bond.

Mitchell Feeds, first licensed in Minnesota in January 2006, and with offices in Horace, N.D., a small town just southwest of Fargo, N.D. The business was established in Minnesota by Robert Mitchell, but documents list Jackie Mitchell as a registered agent. The company bought NuSun sunflowers, and stored and marketed them through Hendrum, which is 28 miles north of Moorhead, Minn., on U.S. Highway 75, in Minnesota’s Norman County.

PSC as trustee?

The PSC filed in a motion with Burleigh County (N.D.) District Court, asking South Central District Judge Donald Jorgenson in Bismarck, N.D., to declare Mitchell Feeds insolvent under state laws, and to appoint the PSC as a trustee.

If approved, the PSC would start administering a $70,000 bond from Western Surety Co. of Sioux Falls, S.D. On May 5, Jorgenson granted a temporary order that prevents Mitchell Feeds from selling or transferring assets until the court decides on the trustee issue. The PSC says any credit-sale contract claims may be payable from a state indemnity fund.

According to court documents, some initial complaints were from the Sherwood and Bowbells areas of North Dakota, in the north-central part of the state. Sue Richter, director of licensing for the PSC, says 12 claims had been filed as of May 9.

Complaints

In one example, James and Cynthia Buckhard of Towner, N.D., on Feb. 1 filed a collection letter for funds owed from half a semi-load of sunflower seeds delivered in May 2009. This was followed by claims from North Dakotans including David Steeves, Sherwood, N.D.; David Deslauriers, Sherwood; Paul Rohde, Halliday, N.D.; Don Ackerson, Sherwood; Steven Neameyer, Mylo, N.D.,; Lana Anderson/Northland Farms, Sherwood; Greg Busch/Busch Farms, Crosby, N.D.; and Mitch Preskey, Glenburn, N.D.

Deslauriers’ letter to the PSC says he’s owed for sunflower loads included in an April 5, 2008, contract. His loads were delivered between Jan. 29, 2009, and Aug. 20, 2009.

In a related issue, the company was operating in North Dakota without a required roving grain buyer’s license until October 2009, after after the PSC sent them a warning. The PSC told the company to cease operations until it got the license and warned of a $5,000 penalty if it failed to do so, but the license was acquired.

Deslauriers claims he received payment for the first two loads, partial payment for four loads and no payment for eight loads. He listed $150,000 in claims for unpaid sunflowers, $7,000 in freight and $27,000 in damages for selling the remaining production at prices below what Mitchell Feeds was obligated under the contract.

“If this component of damages is within the scope of the PSC’s authority to assist in collection, we hereby include those damages,” bringing the total to more than $184,000, says Deslauriers letter to the PSC.

Derrick Braaten of the Bismarck law firm Sarah Vogel Law Partners represents several farmers in related action. He thinks there may be 40 farmers involved in total, with some 20 sending loads that hadn’t been paid for at all.

“Most of the farmers had been dealing with Mitchell Feeds for three to five years,” Braaten says. “Up until recently, they’ve been quick to pay and easy to work with.”

He says the claims he’s familiar with range from $50,000 to nearly $200,000.

Braaten says the case is complicated because it may involve North Dakota grain laws, or Minnesota contract laws, and courts from both states. He has as many clients in the case as he can handle.

He emphasizes, however, that farmers who think they have claims don’t need to have an attorney to file them with the PSC. If approved as trustee, the PSC would file a public notice of the appointment of the trustee and a notice to file claims for two weeks in a daily newspaper and then 45 days — a total of roughly two months.

Richter notes that information on the case can be acquired online:

www.psc.nd.gov, and search for cases in 2011, and Case No. 51. If approved for insolvency by the court, this would be the fourth grain buyer insolvency actively open in the state, Richter says. Other insolvencies with still open cases are VeraSun of Hankinson, N.D., Richland County; Organic Grain and Milling of Clyde, N.D., Cavalier County; and Grabanski Grain of Grafton, N.D., Walsh County.

Tags: