A group of Mississippi Delta farmers will join their counterparts in Arkansas and Louisiana in seeking to recoup millions of dollars Turner Grain Merchandising owes them now that the Brinkley, Arkansas, commodities broker has filed Chapter 11 bankruptcy.
Greenville lawyer Scott Phillips, who represents Leland farmer Harper Ross and five other Delta farmers who say Turner Grain stiffed them for $1.7 million in delivered grain, said the filing will at least bring the numerous lawsuits against Turner to a common venue. “Turner won’t have to defend cases in seven different districts and get inconsistent rulings,” he said.
Turner is facing at least seven lawsuits over allegations of breach of contract, according to Arkansas Business, a weekly business newspaper for Northwest Arkansas.
The business newspaper is reporting Turner Grainfiled for Chapter 11 bankruptcy protection Thursday, listing $24.8 million in debts and $13.8 million in assets.
Those amounts are the same as one a court-appointed receiver listed in a draft of the bankruptcy on Oct. 14.
Some of the largest creditors listed are Southern Rice & Cotton of Harrisburg, Arkansas, with a claim of $3.2 million, and Zero Grade Farms of Blytheville, Arkansas, with a $2.293 million claim.
The Arkansas Democrat-Gazette, a statewide daily newspaper, reported in September that the scope of the grain dealer’s multi-state defaults could reach several tens of millions of dollars.
Beyond the loss of payment for commodities deliveries, the “paper” losses to Mississippi Delta farmers could be as high as $70 million. Those losses would come through Turner Grain’s inability to honor contracts made at the start of the planting season, leaving corn and soy bean growers to sell at today’s much lower price.
Turner Grain’s Chapter 11 filing would follow a Chapter 12 bankruptcy of Turner Grain principal Dale Bartlett, of Marvel, Arkansas. The Chapter 12 filing in the U.S. Bankruptcy Court for Eastern Arkansas buys Bartlett time in his personal defense against lawsuits arising from Turner Grain’s failure to pay farmers in Arkansas, Louisiana and Mississippi.
Bartlett lists assets of about $2 million and debts of about $5.5 million.
Phillips said the grain delivered to Turner Grain by Ross and his other clients went directly to Tyson Foods via g grain distributor Gavilon of Omaha, Nebraska.
Gavilon has claimed it paid Turner Grain in full, according to Phillips. “We don’t know that to be true,” he said in an interview Tuesday.
Phillips said it is far too early to know what his Mississippi clients can hope to recover through the bankruptcy proceedings.
“My stated option is very simple,” he said: “We provided grain and didn’t get paid for it.”
Meanwhile, Arkansas agricultural officials worry that at least $20 million and possibly upwards of $50 million could be involved in the failure of Turner Grain to pay Arkansas farmers for grain deliveries, Arkansas Business reported in late August.
At the moment, Arkansas has no law regarding grain merchandising; regulations only cover grain stored in a warehouse, the business newspaper reported.
Likewise, in Mississippi state bond requirements for grain brokers apply only to square footage of warehouse space purchased grain takes up.
Arkansas Business reported that court appointed receiver Kevin Keech, a North Little Rock attorney, stated in the draft filing that Turner Grain listed 2013 revenue of $277.9 million and $235.3 million so far this year.
The Turner Grain bankruptcy and the damage it has done to the Arkansas farmers has prompted to the state’s Agriculture Department to begin working on legislation to prevent any other company from suffering a similar collapse, Arkansas Business reported Friday.
Arkansas has no licensing or regulations pertaining to grain brokers. “You could be out here and be a grain dealer and all you needed was a telephone, a computer and pickup,” Arkansas Secretary of Agriculture Butch Calhoun told Arkansas Business.