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Published March 14, 2014, 02:40 PM

CHS drops objection in Anderson Seed case

FARGO, N.D. — CHS Inc., on March 7 withdrew a challenge of the North Dakota Public Service Commission’s assessment of its claim against cash grain deliveries to the insolvent Anderson Seed Inc.

By: Mikkel Pates, Agweek

FARGO, N.D. — CHS Inc., on March 7 withdrew a challenge of the North Dakota Public Service Commission’s assessment of its claim against cash grain deliveries to the insolvent Anderson Seed Inc.

Midwest Cooperative, a CHS Inc.-related elevator in Pierre, S.D., is one of the claimants against Anderson Seed. Anderson Seed was based in Mentor, Minn., but had grain receiving stations in Durbin and Selz, in North Dakota. CHS claimed it had delivered $740,140.52 in grain to the North Dakota locations, but the PSC had approved only $45,512 of that claim.

CHS attorney Jon Brakke in Fargo says the company had reviewed additional records and determined it couldn’t “tie the additional quantities to North Dakota,” so dropped its objection.

Cass County District Judge Wickham Corwin on Feb. 25 ruled on a cash settlement of $965,000 that would cover 43 percent of the $2.23 million in cash claims. Separate credit-sale contract holders will receive 80 percent of valid claims, or a net of about $640,000, from a state indemnity fund. Randy Christmann, the North Dakota Public Service Commissioner with the grain license portfolio, says if there are no appeals, the PSC can start paying farmers by mid-June.

Separately, CHS continues a $1.5 million lawsuit against Anderson Seed owners Ron Anderson and his daughter, Stephanie Anderson. That case recently was delayed from an April 2014 court date in Polk County District Court in Crookston, Minn., to January 2015. Brakke says withdrawing the objection in North Dakota has no bearing on the Minnesota case.

In other grain company insolvency-related matters:

• On March 14, the PSC got approval from Burleigh County District Judge Gail Hagerty to initiate credit-sale contract payments from a state indemnity fund to farmers who’d delivered grain to Falkirk (N.D.) Farmers Elevator Co. There are $279,000 in valid credit-sale claims, so reimbursements of 80 percent, or $223,200, can be paid, roughly on the same schedule as the Anderson Seed case.

Separately, St. Hilaire (Minn.) Seed Co. has a federal lawsuit pending against Falkirk Farmers Elevator for $1.7 million, relating to dry edible beans. St. Hilaire claims it purchased warehouse receipts for edible beans from Falkirk, but didn’t receive the beans.

At the time of the Falkirk insolvency, St. Hilaire Seed was owned by the same Anderson family that separately owned Anderson Seed. Legumex Walker of Winnipeg, Manitoba, purchased all of the assets of St. Hilaire Seed and some of the assets of Anderson Seed.

Christmann says if St. Hilaire prevails in its federal court claims, it would file those against a trust account, which could include a $380,000 bond, if needed. It isn’t clear what other assets the claims might come from.

• The PSC on March 17 will ask Morton County District Judge Donald L. Jorgenson in Mandan to approve a payment plan involving the 2011 insolvency of Mitchell Feed of Hendrum, Minn. There are $1 million in valid claims for payment but only a $70,000 bond, Christmann says.

“That’s a sad case because it means just a 7 percent payout,” Christmann says. In the two years before the insolvency, Mitchell Feed purchased sunflowers from claimants in the communities of Towner, Sherwood, Mylo, Crosby and Glenburn, among others.

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