A forensic accountant testified Thursday that a group of Lonoke County farmers lost $5,491,888 in 2014 with the closing of a Brinkley grain dealer.
The nearly $5.5 million represents some 832,700 bushels of rice taken from their farms and delivered for export but for which they never received payment, said Stephen Leek, a certified public accountant.
Leek's testimony came during the fifth day of the jury trial of a civil lawsuit filed by the farmers against entities of Turner Grain Merchandising Inc., which filed for bankruptcy in 2014. Turner Grain Merchandising listed some $14 million in assets and $47 million in debts in a bankruptcy filing still being unraveled in U.S. Bankruptcy Court in Little Rock.
Turner Grain was closed in August 2014 by federal regulators after they found no grain in bins certified as being full. Turner Grain Merchandising isn't a defendant in the Lonoke County case because of the filing for bankruptcy protection.
Defendants include KBX Inc., a grain broker in Benton; three of its employees; and Dale Bartlett, a co-founder of Turner Grain Merchandising. The other co-founder, Jason Coleman, died early last year.
The plaintiffs seek an unspecified amount in compensatory and punitive damages.
Leek was a witness for the plaintiff-farmers.
Attorneys for the defense have acknowledged the farmers never got paid for their grain.
There's no indication that any of the Turner Grain entities have any money, and attorneys for KBX say their clients paid Turner Grain for all the rice they bought from the company.
The trial is scheduled to run through Feb. 28.
Attorneys for the farmers contend that Turner Grain was an agent of KBX and that it is KBX who owes farmers.
On cross-examination by Paul D. McNeill, a Jonesboro attorney for the KBX employees, Leek said determining whether KBX paid Turner Grain wasn't part of his obligation in determining the market value of the farmers' rice and studying barge-load summaries from Consolidated Barge and Grain's shipping facility in West Memphis.
McNeill presented a series of KBX checks paid to Turner Grain that summer, though plaintiffs' lawyers noted that one payment came well before the shipment of the farmers' rice to Consolidated Barge and Grain began in July 2014 and continued until Aug. 18, a few days after Turner was closed.
Much of the farmers' case this week has been focused on those grain-delivery documents. For much of 2013, according to their attorneys, Turner Grain consistently was receiving documents from Consolidated Barge and Grain for the shipments that also involved KBX.
Christopher Taylor, a broker for Turner Grain, testified earlier in the week that receiving those documents was essential to paying farmers.
Receiving the documents from Consolidated Barge and Grain ended in April 2014, Taylor testified, when an employee for Consolidated told him that the documents would have to come from KBX. Taylor also is among the defendants in the lawsuit.
Getting the documents from KBX was a problem all summer, as were the absences of Turner's co-founders, Taylor said. He said Coleman and Bartlett were no longer communicating, with Coleman absent much of the time for health reasons and Bartlett just not appearing in the office anymore.
By early August, it was clear the company was in trouble, Taylor said. "I feared for my livelihood. I feared for my customers," he said.
Attorneys for the farmers have through next week to make their case, according to a schedule released by Lonoke County Circuit Judge Sandy Huckabee. Attorneys for the defense will have nine days, starting Feb. 18, to present their case.
Business on 02/07/2020
Print Headline: At grain trial, '14 loss put at $5.5M