PIERRE, S.D. (AP) — South Dakota regulators decided Tuesday to seek the assets of a sunflower seed company that may owe farmers in South Dakota and North Dakota more than $4 million.
However, members of the South Dakota Public Utilities Commission and lawyers for farmers said there likely are not enough assets in South Dakota to cover what Anderson Seed Co. Inc. owes to farmers who were not paid for sunflowers delivered to the company's operation in Redfield.
PUC Chairman Chris Nelson said the commission would seek only short-term control of the assets because it is not set up to oversee such an operation for a longer time.
"But I'm of the opinion this commission needs to do everything possible to give our producers the best possible advantage as they go through this," Nelson said. "At the end of the day will this make any difference? We don't know."
The commission voted to go to court to seek receivership of the company's $100,000 bond, grain stored in Redfield that may be worth $600,000, and other assets of Anderson Seed's operation in Redfield. Money from the bond and the sale of grain and other assets would be used to repay farmers who have not been paid for sunflowers.
The PUC also formally revoked Anderson Seed's license to buy grain in South Dakota.
No one representing Anderson Seed took part in the commission's hearing Tuesday. The company's lawyer, Gary Leistico of St. Cloud, Minn., did not return a telephone call seeking comment.
Anderson Seed is based in Mentor, Minn. It owned the sunflower processing plant in Redfield and formerly owned two North Dakota sunflower storage warehouses and a processing plant.
Legumex Walker Inc., a grain processor based in Winnipeg, Manitoba, recently bought the North Dakota facilities, but not the South Dakota plant located in Redfield. PUC staff attorney Kara Semmler said Anderson Seed has reported that the Redfield location was deeded last month to a new Minnesota corporation, BinCo Holding, until environmental issues are settled at the site, which is located on a previous landfill.
One of the three PUC commissioners, Gary Hanson of Sioux Falls, recused himself from the case Tuesday because his son works for US Bank, which holds a secured loan on the Redfield facility.
The North Dakota Public Service Commission also has gone to court to take over Anderson Seed assets, including a bond and any available grain.
South Dakota PUC officials estimate Anderson Seed owes farmers in the state $2.6 million for grain they delivered to the Redfield facility. North Dakota officials have said farmers in that state have already filed more than $1.4 million in claims against the company.
Ray Martinmaas, a farmer from Polo, asked whether he can recover the grain he delivered to Anderson Seed or the $47,000 the company owes him.
Nelson said the PUC hopes sufficient assets exist to cover farmers' losses, but he said the commission still has a lot of questions about what went wrong at Anderson Seed.
"Obviously something went south very quickly. As this plays out, that's something we want to get a handle on, how that happened," Nelson said.
Brett Koenecke, a Pierre lawyer representing a farm operation that sold grain to Anderson Seed, said the commission's decision to go to court to seek company assets could help farmers by slowing down various financial transactions. That could encourage secured creditors like banks to taken note of the farmers who have lost money, he said.