MARIANNA -- A window into the operations of Turner Grain Merchandising Inc. was opened Thursday during a hearing on a motion in the case that has riveted attention on the operations of the firm linked to defaults to farmers that state agricultural officials have estimated at between $20 million and $50 million.
Lee County Circuit Judge Richard Proctor lifted the order he issued Aug. 20 freezing the assets of Turner Commodities Inc.
Proctor agreed with Turner Commodities President Gerald Loyd that farmer Lance Gray's allegations that he and his Dumas-based business were engaged in fraud, deceptive practices, issuing hot checks and conspiracy were unsupported.
Gray took the witness stand and Loyd's attorney, Brooks Gill of Dumas, broke down Gray's statements, getting him to admit that he had no personal evidence to back up his sworn statement.
Gray also said that he never had any business deals with Loyd and Turner Commodities.
Loyd said the publicity surrounding a lawsuit seeking the injunction had ruined his reputation, but that he was trying to start a new business.
Turner Grain was sued Aug. 18 by eight farmers, including Gray, who accused Turner Grain, Turner Commodities, other of related agricultural businesses and their officials, including Loyd, of failure to pay them for their harvests and issuing hot checks. Loyd has been the only person to challenge Proctor's order.
Two of those officials, Jason Coleman and Dale Bartlett, were equal partners with Loyd in Turner Commodities, Loyd testified under questioning by David Hodges, who represented Loyd.
He stated that he, Coleman and Bartlett formed Turner Commodities in late 2004, and it was incorporated the next year.
By 2007 or 2008, it was evident that Coleman and Bartlett were not good businessmen, Loyd said, adding that they were not "transparent" in their dealings with him. Neither Coleman nor Bartlett were at the hearing and have not returned numerous telephone messages.
Nevertheless, he continued to run Turner Commodities keeping one set of books while Coleman and Bartlett kept another.
He discovered that things were worse than he had thought when his monthly paycheck drawn on a Turner Commodities account bounced Aug 4. That has left the company with $70 in the bank, he said.
A few days later, Coleman called Loyd saying he was in the hospital. Loyd said Coleman was very emotional and crying.
"Gerald, I am so sorry. I really messed up," Loyd testified that Coleman told him. Coleman offered to sign over the title to his pickup and a four-wheeler, Loyd testified.
Loyd testified that Coleman told him he "got on the wrong side of a position."
On occasion, Loyd testified, the grain that he had purchased had to be supplemented by grain bought by Turner Grain to make a barge load.
He said Turner Commodities has lost about $250,000 because of Turner Grain's actions. A check for $125,000 intended for Turner Commodities was deposited into a Turner Grain account.
He said Coleman took about $21,000 from a Turner Commodities account.
But he said his business was "doing OK till I got sued." He has about 10 active contracts on corn with about six or seven farmers, he said.
Also Thursday, members of Arkansas' delegation sent a letter to U.S. Agriculture Secretary Tom Vilsack asking the federal department to extend the amount of time farmers have to repay a USDA loan on the grain given to Turner Grain.
"Dozens, if not hundreds of Arkansas farmers stand to lose everything as a direct result of Turner Grain's apparent mismanagement," said the letter from U.S. Reps. Rick Crawford, Tim Griffin, Tom Cotton and Steve Womack. "At a time when the average age of a row crop farmer is 58, this business failure could deal a devastating long-term blow to Arkansas' agricultural community and have a chilling effect on young farmers now positioned to replace our aging agriculture producer base."
The letter said farmers should be given an extension of 180 days, with a review after 90 days to determine if additional time is need beyond the initial 180 days.
Arkansas' Secretary of Agriculture Butch Calhoun also asked the federal agency this week to help the farmers by giving them an extension on the loan. He also requested low-interest emergency loans for the affected producers.
Information for this article was contributed by Jessica Seaman of the Arkansas Democrat-Gazette.
Business on 08/29/2014