Dale Bartlett, president of Turner Grain Merchandising of Brinkley, filed for bankruptcy protection Friday under Chapter 12, which is designed for individuals involved in agriculture.
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Farmers in southeast Arkansas have filed suit against Turner Grain, contending the company failed to pay them for grain that was harvested and delivered.
Arkansas Agriculture Secretary Butch Calhoun announced Friday in a news release that the U.S. Agriculture Department has agreed to extend the deadline for farmers doing business with Turner Grain to repay federal crop loans by another 60 days, in addition to 30 days already granted.
Calhoun said he has also asked the federal agency for low-interest emergency loans but he has not gotten a response.
Bartlett's filing in the U.S. Bankruptcy Court for Eastern Arkansas buys him time in his personal defense against the lawsuits arising from Turner Grain's failure to pay the farmers for crops valued at tens of millions of dollars, according to estimates.
"Time is the ally of a defendant," said Josh Silverstein, a professor at the William H. Bowen School of Law at the University of Arkansas at Little Rock. The bankruptcy filing puts court actions against him on hold, Silverstein said.
Bartlett is one of several individuals and businesses that have been sued by farmers in circuit courts in Lee and Lonoke counties.
He lists assets of between $1 million and $10 million and liabilities in the same range.
Twenty-seven creditors are listed, including some of the farmers who have sued Turner Grain, as well as some of the defendants in the suits: Jason Coleman, owner of Turner Grain; Neauman Coleman, owner of Neauman Coleman & Co.; Agribusiness Properties LLC; and Brinkley Truck Brokerage.
Bartlett's filing also includes a certificate showing that he has received credit counseling from the Mesquite Group Inc. through the Internet. The Arlington, Texas-based firm's website says the Internet counseling fee is $24.
Meantime, state lawmakers are doing fact-finding about possible legislation to prevent the recurrence of such a scenario, Speaker of the House Davy Carter, R-Cabot, said Thursday.
A joint House and Senate committee hearing Aug. 22 focused on the possibility of requiring the licensing and bonding of grain dealers. But Carter said the private sector also might have ideas to address the situation.
Rep. Nate Bell, R-Mena, suggested that dealers be required to put their transaction in writing and post a payment bond or, if the seller wants, the bond can be waived at the seller's risk.
The Farm Bureau will take up the matter Dec. 5 at its annual business meeting, which will be held in Hot Springs, said President Randy Veach.
Veach said that bureau will reach a decision after meetings are held at the county level and delegates are sent to Hot Springs.
Grain crops will account for about $3.7 billion of the state's $20 billion agriculture industry this year, according to figures from the state Agriculture Department.
Two lawsuits have been filed by farmers against Turner Grain, related businesses and individuals, one in Lee County Circuit Court and the other in Lonoke County Circuit Court.
The U.S. Agriculture Department on Aug. 14 suspended the license of Agribusiness Properties LLC, the storage arm of the confederation of businesses connected with Turner Grain, effectively shutting down the dealers.
Agribusiness Properties has until Sept. 14 to restore its standing with the federal government. If it does not, its license will be revoked.
Four of the six states that surround Arkansas require licensing of grain dealers. Turner Grain is not registered in those states -- Missouri, Louisiana, Tennessee and Mississippi -- although the firm was registered in Mississippi in 2011 and 2012, said Julie McLemore of the Mississippi Agriculture and Commerce Department.
No complaints were filed against Turner Grain in those years, McLemore said.
Calhoun said he had heard that Turner Grain was doing business in the bootheel of Missouri.
Oklahoma does not require licenses, although it has a $10 million indemnity fund from which its money comes from a "check-off" levy imposed on producers. If the fund falls below $10 million, the check-off fee is resumed, said Larry Rudebusch of the Oklahoma Department of Agriculture, Food and Forestry.
Texas does not license grain dealers, nor does it have an indemnity fund, said Bryan Black, communications director for the Texas Department of Agriculture.
"Texas grain producers voted against the establishment of a grain indemnity fund," Black said in an email.
Business on 09/06/2014