Farmers Wait for Turner Grain's Next Move

by Mark Friedman  on Monday, Aug. 25, 2014 12:00 am  

Sources say they expect Turner Grain Merchandising Inc. of Brinkley to file for bankruptcy.

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.

 

 

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