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$4M Settlement Approved in Turner Grain CaseLock Icon

2 min read

Creditors in the bankruptcy case of Turner Grain Merchandising Inc. of Brinkley received some good news last month. U.S. Bankruptcy Judge Phyllis Jones approved a $4 million settlement between Turner Grain’s Chapter 7 trustee and Gavilon Grain LLC of Omaha, Nebraska.

If you recall, Turner Grain operated as a grain broker with Gavilon as its largest trading partner, according to an arbitration decision filed in March 2020. Turner closed in August 2014 after it was discovered the company wasn’t paying farmers for their crops.

The company filed for bankruptcy protection and listed $13.7 million in assets. Its claims showed $39.7 million in debts, millions of which are owed to farmers who did business with Turner.

M. Randy Rice of Little Rock, Turner Grain’s Chapter 7 trustee, said Gavilon stopped doing business with Turner Grain in late August 2014, two weeks before it was forced into involuntary receivership in September 2014, according to the arbitration decision.

Rice wanted to recover millions of dollars from Gavilon under three main claims: unpaid shipments of corn, unpaid shipping charges and improper cancellation of contracts.

The dispute ended up before the National Grain & Feed Association. The arbitrators found that Turner Grain’s claim for unpaid corn shipments was not supported by evidence presented in the case. It also found that the unpaid shipping charges were unsupported and denied that claim. But the arbitrators ruled that there was improper cancellation of contracts and awarded $5.6 million to Rice.

Gavilon appealed the finding to the NGFA Arbitration Appeal Committee, and oral arguments were scheduled in Washington for Nov. 3. But before that happened, on Oct. 22, five years to the day after the case was filed, both sides reached the settlement.

“Litigation has been ongoing in this case for over five years,” Rice said in a statement to Whispers. “The settlement of this claim provides a degree of certainty in its outcome. It also enables me to move forward with a proposal to make a substantial interim distribution of funds to the farmers and other creditors in this case without further delay.”

An attorney for Gavilon, Lance Miller of Mitchell Williams Selig Gates & Woodyard of Little Rock, declined to comment.

Turner Grain’s bankruptcy case remains open.

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