Icon (Close Menu)

Logout

Farmers Wait for Turner Grain’s Next Move

5 min read

As legal action began last week against Turner Grain Merchandising Inc., the fate of the Brinkley company remained unclear.

Several sources have told Arkansas Business that they expect Turner to file for bankruptcy protection, but that hadn’t happened as of Wednesday. Farmers who have done business with Turner might be exposed to losses in the millions, sources have told Arkansas Business.

Dale Bartlett, president of Turner Grain, and Jason Coleman, vice president, haven’t returned repeated calls for comment.

If Turner does file for bankruptcy, it could choose to reorganize or liquidate its assets.

However, some farmers apparently had only oral contracts with Turner, said one agriculture expert who asked not to be named because the story is still developing. That lack of formal contracts could complicate a Turner bankruptcy.

“Just think of the magnitude of that,” he said. A number of farmers sold crops without a written contract to Turner, who “doesn’t have to be licensed or registered, apparently,” he said. “And all they need is a brick building in Brinkley, Arkansas, and a telephone and they’re moving millions of dollars of stuff.”

The state House Agriculture, Forestry & Economic Development Committee was scheduled to hold a hearing on Friday, after Arkansas Business’ Thursday deadline, to discuss regulating grain merchandisers such as Turner.

Turner is not a broker whose role is limited to taking a commission for matching sellers with buyers. Instead, Turner is a “principal” or “jobber,” actually contracting to buy and taking possession of the farmer’s grain and delivering it to the ultimate buyer.

The purpose of the hearing on Friday “is not to dive into what’s going on in Brinkley,” Arkansas House Speaker Davy Carter, R-Cabot, told Arkansas Business last week. “It’s rather to take a look at that process and … to better understand the process and what, if anything, can be done at the state level to prevent … or decrease the likelihood of something like that happening again.”

Meanwhile, Turner will have to deal with two court proceedings. The company is being sued by a group of farmers who allege that they haven’t been paid for grains they sold to Turner. Also last week, Bruce Oakley Inc. of North Little Rock filed an interpleader action in U.S. District Court in Little Rock asking a judge to decide what to do with $360,000 it owes Turner.

‘In a Panic’

As of last week, Turner’s case was raising more questions than answers.

Several farmers in the Midsouth recently have called Bruce Oakley Inc. searching for any money of theirs that Turner owes them, David Choate, vice president of grain and barge operations for the North Little Rock company, told Arkansas Business last week.

Choate said even farmers from Mississippi have called Oakley “in a panic.” Turner also has producers in Louisiana and Missouri.

The amount of debt is “going to be pretty widespread when it all falls out,” Choate said.

He said that in recent years, Turner paid some farmers a “ridiculously high” amount for grain, which “didn’t make any sense.” He said that caused financial trouble because when it was time to sell, Turner couldn’t sell it for that price.

“So they had to buy more, so they paid too much again … . That’s my opinion of what happened,” Choate said.

Bruce Oakley recently was going to pay $103,275 to Ivory Rice LLC, a related company that operates out of the same building as Turner, but Bruce Oakley stopped payment on the check, according to Bruce Oakley’s interpleader.

“We have a small amount of [Turner’s] money because they do deliver to us and sell to us, but we turned that all over to our legal department,” Choate told Arkansas Business last week. “Because we’re not in a position to divvy out who [Turner] owes and who they don’t owe.”

Turner has asked a federal judge to decide who gets paid.

“There are competing claims to the proceeds of grain in storage and proceeds of” Ivory Rice’s check, the Oakley filing said. “As a result, Oakley cannot make payment of the grain in storage or proceeds of stopped check without resolving disputed questions of fact, and exposing itself to multiple lawsuits, multiple liabilities, or both.”

Oakley said the companies that have a claim include Peco Foods of Newark, $148,930; Tyson Foods in Hope, $47,072; and Wayne Farms of Danville, $38,700.

Oakley’s attorney, Fletcher Lewis of McCrory, didn’t return a call for comment Wednesday.

Other Legal Action

Turner also is being sued by a group of farmers who allege they haven’t been paid for grains they sold to the grain merchandiser.

The eight farmers, who have fields in Monroe, Phillips and Lee counties, said in a lawsuit filed Aug. 18 in Lee County Circuit Court that they had commodities contracts to sell grain to Turner. They said Turner either hadn’t paid them for their products or that checks they received from the company bounced.

Turner since had sold their grain to third parties, the lawsuit said.

The farmers operate under the names of High Roads Farms, Foran Farming, Greenleaf Farms, Roger Wilkison Farms and David and Lalain Wilkison Farms. Their lawsuit supplies almost no other details about what happened, including how much money the farmers allegedly lost or when the alleged losses occurred. The farmers’ attorneys, Louis Etoch of Helena and David Hodges of Little Rock, didn’t return a call Wednesday.

Several entities related to Turner Grain are named as defendants, including Neauman Coleman & Co. of Brinkley, Turner Commodities Inc. of Dumas, Brinkley Truck Brokerage LLC of Brinkley, Agri-Petroleum Sales LLC and Agri-Business Properties LLC.

Bartlett and Coleman, the Turner executives, are also named as defendants.

The 10-page lawsuit also alleges that the defendants “have transferred funds from one or more of the Defendants to the other Defendants, concerning property rights, belonging to the Plaintiffs.”

The farmers want a restraining order placed against Turner Grain and the other defendants to prevent them from disposing of any assets. The farmers are also seeking an unspecified amount of damages for several counts including breach of contract, conversion and negligence.

As of Wednesday evening, Turner hasn’t filed a response in either legal action.

Send this to a friend