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Published June 24, 2014, 10:59 AM

SD Attorney General rules Anderson Seed is civil, not criminal case

An investigator for the South Dakota Attorney General’s office has told farmers and elevator operators owed money in the Anderson Seed Inc. insolvency that the case is civil, and criminal charges won’t be filed against Ron and Stephanie Anderson and their Mentor, Minn.-based sunflower processing company.

By: Mikkel Pates, Agweek

ABERDEEN, S.D. — An investigator for the South Dakota Attorney General’s office has told farmers and elevator operators owed money in the Anderson Seed Inc. insolvency that the case is civil, and criminal charges won’t be filed against Ron and Stephanie Anderson and their Mentor, Minn.-based sunflower processing company.

“Just recently, the Attorney General ruled the case against Anderson Seed to be a civil case,” writes special agent Dave Lunzman of Aberdeen, S.D., in an email to a group of claimants. “With that decision, my involvement in the case is over. I wish I had better news, but with the laws in place at the time, our hands are tied.”

Lunzman referred farmers and others to direct further questions to the attorney general’s office. Agweek messages to the attorney general’s office in Pierre, S.D., were not immediately returned.

Ray Martinmaas of Orient, S.D., whose family lost $47,000 in unpaid sunflowers, says he is disappointed. He has been pressing the Spink County State’s Attorney in Redfield to pursue charges against the Andersons, but says he’s run into the same reluctance.

Anderson Seed Inc. went insolvent in February 2012, blaming market conditions and failure of some farmers to deliver on contracts. The Andersons sold assets of Anderson Seed and a sister company, St. Hilaire Seed of St. Hilaire, Minn., to Legumex Walker of Seattle, Wash., and Winnipeg, Manitoba. Anderson Seed has receiving stations in North Dakota and a processing plant in Redfield, S.D. Farmers and elevator shippers initially estimated $5 million in losses from unpaid shipments in the two states. There were no reported losses at Minnesota elevators.

On Feb. 25, 2014, Cass County, N.D., District Judge Wickham Corwin had ruled on a cash settlement of $965,000 that would cover 43 percent of the $2.23 million in cash claims for sunflowers delivered only to North Dakota elevators. Separate credit-sale contract holders were to receive 80 percent of valid claims in the state, or a net of about $640,000, from a state indemnity fund for credit-sale contracts only. The Public Service Commission, the trustee in the case, expected payments to start in mid-June.

Credit sales are contracts for which pricing or payment are delayed, and for which the farmer or delivering owner turns over ownership title to the grain or sunflowers so the purchaser can market it.

Kevin Kessel, a Belfield, N.D., farmer who was owed $149,000, but who expects payment of $89,000 in the settlement from both cash and credit contracts, says he contacted his attorney because there had been no payment as of June 24. Kessel says the attorney had contacted the PSC, which assured him checks would be cut by June 27.

Separately, Midwest Cooperative, a CHS Inc. elevator in Pierre, S.D., continues its case in Polk County, Minn., district court in Crookston. The elevator claims $1.5 million in damages because of unpaid sunflowers and resulting market impacts. That case is scheduled to go to trial in January 2015. CHS had claimed $740,140.52 against the company in the North Dakota cash claims case, but eventually accepted a payment of $45,512.

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