Frequently Asked Questions regarding the Gallatin Grain Insolvency

As a claimant, what has to happen for me to get paid?

No further action is needed by individual claimants. The Department will present all claims received during the claim period at the hearing.

An Administrative hearing must be held to determine the validity of the claims and the applicability of the bonds in this matter. The hearing officer will make a ruling on the validity of the claims and the valuation of each. The hearing officer’s ruling also will spell out the pro rata share of the available funds each claimant is to receive. A copy of the hearing officer’s ruling will be distributed to all claimants and interested parties upon issuance.

Claimants and other parties will have the opportunity to appeal the hearing officer’s ruling. After the appeal period passes and assuming no appeals are filed, the hearing officer’s ruling will be presented to the Daviess Co. Circuit Court for final approval. The Circuit Court then approves the payout plan established at the hearing or the judge may amend the hearing officer’s order. Checks will be sent to claimants after the Circuit Court’s ruling.

What happens at the Administrative Hearing?

Representatives of the Department will testify as to the actions taken in initiating the seizure of the business and why those actions were necessary. Testimony and/or exhibits may show names and amounts of all claimants and how the value of each was determined. Testimony and/or exhibits will show the Department’s proposal for distributing available funds to eligible claimants and why some claims or a portion thereof are deemed ineligible to participate in the proceeds of the bonds.

Claimants are invited to attend the hearing, but attendance is not required and does not impact the amount or timing of any payments.

Claimants will have the opportunity to testify if they so desire, but the Department does not plan to call individual claimants to testify.

The owners of the business also have the opportunity to attend and to testify.

Why do we need both an Administrative Hearing and an order by the Circuit Court?

The Department has authority to conduct an administrative hearing for the distribution of the bond proceeds. The Department took possession and became trustee of the other grain related funds of Gallatin Grain Company under an order by the Circuit Court. Therefore, the Circuit Court has final say in the distribution of the funds.

Are the owners of the elevator facing criminal charges?

Yes, MDA officials are working closely with Davies County Prosecutor Attorney and the Missouri Attorney General’s Office to insure that criminal charges are pursued.

Why did the elevator property transfer to a new owner?

In comparing the appraised values of the elevator properties and the amount of secured liens against the elevator properties, it was apparent that no funds would be gained from the selling of the elevator properties. In exchange for abandoning the properties, one of the largest claimants agreed to purchase the elevator properties from the lien holders and agreed to not file a claim against the elevator bonds, thus allowing more bond money to be available to pay the remaining claimants.

How are the bonds established and what do they cover?

Warehouse bonds are computed on the elevator’s capacity pursuant to 411.278 RSMo. Based on the elevator capacity of 698,000 bushels, Gallatin Grain was required to post a $160,000 warehouse bond. Warehouse bonds proceeds will be utilized to pay for grain that was placed on storage (where title to the grain remained with the farmer/depositor). Gallatin Grain actually posted a $184,000 bond.

Grain Dealer bonds are based on the dealer’s volume of business, pursuant to 276.436 RSMo. A dealer is required to post a bond equal to 1% of their annual purchases reported during their last fiscal year. Gallatin Grain reported purchasing $12.9 Million on their last license renewal, which required a dealer bond of $129,000. Grain Dealer bond proceeds will be utilized to pay for grain that was sold to Gallatin Grain where price was established, but payment had not occurred. Gallatin Grain actually posted a $223,000 grain dealer bond.

What grain claims would not participate in proceeds from the bonds?

Any claim that was placed on a credit sales contract will not participate in bond proceeds. Credit Sales Contracts are defined as: delayed price, deferred price, price later or no price established. Any claim that was made for grain sold on deferred payment where payment did not happen within 12 months will also not participate in bond proceeds.

Who can I contact if I have further questions?

Please contact the Grain Regulatory Services Program at (573) 751-4112.