Former Arkansas grain dealer testifies in farmers' missed-payment suit

FILE — The Turner Grain storage facility near Brinkley was shut down in 2014 by U.S. Department of Agriculture agents when they found no grain inside despite documents indicating otherwise.
FILE — The Turner Grain storage facility near Brinkley was shut down in 2014 by U.S. Department of Agriculture agents when they found no grain inside despite documents indicating otherwise.

LONOKE -- Dale Bartlett, a co-founder of the defunct Turner Grain Merchandising Inc., testified Wednesday that his company had no ties to a major rice exporter beyond day-to-day business transactions.

Bartlett, 50, of Marvell is among the defendants in a lawsuit filed by a group of Lonoke County farmers who were never paid for rice taken from their farms in their 2014 deals with Turner Grain Merchandising and then sold elsewhere. They lost nearly $5.5 million when Turner, a grain merchandiser in Brinkley, was closed in August 2014 when federal regulators found no grain in bins certified as being full.

The farmers sued in Lonoke County Circuit Court, where the jury trial is now in its third week and is scheduled through Feb. 28. The farmers seek an unspecified amount in compensatory and punitive damages.

Bartlett is a defendant in the lawsuit, as are a Turner Grain entity that sold fuel to farmers; KBX Inc., a grain exporter once based in Benton; and three KBX employees, including its founder and president.

The farmers allege that Turner Grain was an "agent" of KBX, and that it is KBX that owes farmers for their grain.

Turner Grain Merchandising Inc. filed for bankruptcy protection in October 2014, eventually listing some $14 million in debts and $47 million in assets. The parent company isn't a defendant in the Lonoke County case because of the filing in U.S. Bankruptcy Court.

Bartlett, who has filed for personal bankruptcy, said Turner Grain began doing business with KBX almost immediately after he and the late Jason Coleman started the company in 2002. It is named after a small community in southern Monroe County.

"KBX paid for every bushel of grain I've ever sold them," Bartlett said, although he, according to his testimony and that of others, was mostly absent during Turner Grain's final months of operations. He said Coleman, who died last year, bought out his share of Turner stock in February 2014.

It was Turner Grain that contracted with farmers for their grain and then sought out buyers, such as KBX, Bartlett testified.

KBX never knew the names of Turner's customers -- the farmers -- because "it wouldn't have been any of their business," Bartlett said.

Bartlett also said he didn't know of Turner Grain's efforts during its final few months to offer farmers prices considerably higher than those being offered by other merchandisers, as a way of gaining market share.

Those per-bushel differences, according to earlier testimony by a witness for the plaintiffs, ranged from 33 cents to 99 cents. Such a price difference can't be sustained, according to testimony.

According to depositions in Turner's bankruptcy case, FBI agents looked into the company's collapse, but no federal criminal charges were filed.

Last fall, Bartlett was convicted in Monroe County Circuit Court of a felony hot-check charge, for a check mailed to a farmer that was returned by the bank for insufficient funds.

Bartlett testified Wednesday that the use of his stamped signature on that check wasn't authorized. He is appealing that conviction. Coleman also was charged with writing hot checks on behalf of Turner Grain, but those charges were dismissed after his death.

Steven Keith, who founded KBX in 1980 and is its president, testified Wednesday that he never knew the names of the farmers whom Turner Grain dealt with, including the names of the Lonoke County plaintiffs, until the lawsuit was filed. "We do not buy from farmers," Keith said. "We never have."

Keith estimated that 27% of KBX's corn-and-rice dealings were with Turner Grain. Turner officials, meanwhile, have estimated that 80% of its business was with KBX.

KBX was issued a bad check by Turner Grain, for $532,923, in Turner's final days, according to testimony in Lonoke County and in U.S. Bankruptcy Court in Little Rock.

"I think the farmers should have been paid, but KBX's contract was with Turner Grain and we paid," Keith said.

Business on 02/20/2020

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