The South Dakota Public Utilities Commission on Feb. 17 immediately suspended the grain buyer's license for a Mentor, Minn., -based sunflower company, for its processing and handling facility at Redfield, S.D.
If unchallenged, the license for Anderson Seed Co.'s processing and storage facility at Redfield will be revoked in 15 days. The action was taken in the wake of reports that farmers have not been paid for more than $2.6 million in grain deliveries last fall. Officials in North Dakota and Minnesota are also monitoring the situation.
Neither owner Ron Anderson nor his daughter, Stephanie Anderson, who still manages the business, nor their attorney, participated in the telephone conference hearing, which was based in Pierre, S.D. The Andersons and their lawyer told SDPUC staff they would be absent because they didn't object to the petition to suspend.
Meanwhile, the Minnesota and North Dakota assets of Anderson Seed Co. were sold to a Canadian buyer on Feb. 15, as well as the larger St. Hilaire Seed Co. Ron Anderson was the CEO of both companies. The two deals totaled nearly $19 million.
According to the SDPUC, the Redfield facility was established and licensed in September 2010. In the hearing, James Mehlhaff of the SDPUC's Grain Warehouse Division, said that, after seven months of operation, the company appeared to have unpaid or late amounts totaling more than $2.6 million. The company's bond is for $100,000, held by Auto Owners Insurance of Lansing, Mich.
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Informal counts of farmers with unpaid deliveries ranges from 30 to 40, but may change, SDPUC chairman Chris Nelson said in an interview.
An audited financial report at the end of the fiscal year, Sept. 30, 2010, showed the company with $243,000 in working capital and net worth at more than $2.5 million -- "well within the licensing requirements," Mehlhaff said.
After reports of slow payment in early January, Mehlhaff investigated. The Andersons promised payments to initial complainants, and those payments initially were made. Mehlhaff looked further when updated balance sheets he requested, current as of Sept. 30, 2011, showed the company's stockholders' audited equity at a negative $11.3 million. An updated, unaudited figure for December 2011 was nearly a negative $11.5 million.
A new, larger round of farmer complaints came in during the first week of February, and Mehlhaff requested a meeting with the Andersons, who then failed to send the promised checks to producers, and stopped communicating with the agency, he said.
Agweek is owned by Forum Communications Co., which owns the Herald.
