ND regulators move to take over sunflower companyBISMARCK, N.D. — North Dakota regulators filed court documents Thursday to take over a sunflower seed company that may owe farmers in North Dakota and South Dakota more than $4 million.
By: Dale Wetzel , Associated Press
BISMARCK, N.D. — North Dakota regulators filed court documents Thursday to take over a sunflower seed company that may owe farmers in North Dakota and South Dakota more than $4 million.
There may be little, if anything, left for the state Public Service Commission to grab. Anderson Seed Inc.'s two North Dakota warehouses were sold to a Canadian company last month, and commission inspectors say the sunflowers stored there have been moved to Minnesota.
The commission is asking a judge to declare the company insolvent and wants the authority to take the company's $280,000 bond and sell any available grain. The money would be used to compensate farmers who haven't been paid for their sunflowers.
Calls to Anderson Seed's offices on Thursday were referred to St. Cloud, Minn., attorney Gary Leistico, who did not respond to telephone or email messages asking for comment.
Anderson Seed is based in Mentor, Minn. It owns a sunflower processing plant and grain storage warehouse in Redfield, S.D., and formerly owned the two North Dakota sunflower storage warehouses and a processing plant in Mentor.
Legumex Walker Inc., a grain processor based in Winnipeg, Manitoba, bought the Mentor plant and the North Dakota warehouses on Feb. 15 for $4.8 million, company spokesman Jon Austin said Thursday.
Legumex Walker did not take on Anderson Seed's debts in the transaction, Austin said, and the company also did not buy Anderson's South Dakota properties. The Redfield processing plant closed last month.
The warehouses — one in Durbin, N.D., about 25 miles west of Fargo, and the other in Selz, N.D., about 80 miles southeast of Minot — are both licensed to hold almost 300,000 bushels of grain. A North Dakota court filing said the Selz warehouse is empty, and the Durbin facility has “minimal grain inventory of unknown quality.”
When a North Dakota grain storage company goes broke, the grain it owns is among the assets that state regulators may sell to recoup money owed to farmers. The court filing says the sunflowers in Anderson's North Dakota warehouses have been moved to Fertile, Minn.
The Public Service Commission issued an order last week barring Anderson Seed from buying grain in North Dakota, and from moving grain within the state.
Tony Clark, the commission's chairman, said more than 20 North Dakota farmers have already filed more than $1.4 million in claims, asserting they have not been paid for sunflowers they delivered to Anderson Seed.
In South Dakota, the state Public Utilities Commission estimates that 20 to 30 South Dakota farmers are owed more than $2.6 million, said Chris Nelson, the commission's chairman. The commission suspended Anderson Seed's state grain-buying license Feb. 17. Nelson said the company did not contest the suspension.
Financial statements detailing Anderson Seed's condition in December indicated the company was about $11.5 million in debt, Nelson said.
Clark said Anderson Seed's creditors may make claims against its $280,000 bond. North Dakota farmers who sold sunflowers to Anderson Seed on credit also may try to collect from a state insurance fund, which has about $7 million.
In a credit sale, a farmer delivers grain to a warehouse and agrees to wait more than 30 days for payment. North Dakota's credit sale insurance fund may pay up to 80 percent of the amount owed. The payout to a single farmer is limited to $280,000.
“We won't know that total that's due until we go through the insolvency proceeding and we determine what are valid claims,” Clark said. The amount of North Dakota claims, he said, “could be north of $2 million.”
Copyright 2012 The Associated Press.
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