The South Dakota Public Utilities Commission granted PUC staff’s request to close docket GW20-002 addressing insolvency concerns for licensed grain buyer and grain warehouse Kingsburg Grain & Feed, LP of Springfield, South Dakota, at the commission’s regular meeting on March 5 in Pierre.
This action concludes many months of work by the company, PUC staff and other interested parties to minimize the impacts of Kingsburg’s insolvency. Through the efforts and cooperation of those involved, a successful resolution was reached resulting in no losses to producers or creditors and maintaining a fully operational facility in the community through the sale of the Kingsburg to Lesterville Feed and Grain Inc.
“During my tenure with the commission, there have been a couple of times when grain buyers have gone out of business and left farmers holding the bag. This could have been another one, but in this case, PUC staff got involved very early, identified the problem and then spent a great deal of time and effort working with parties to improve the situation,” said PUC Chairman Chris Nelson. “To have an insolvency resolved in a manner that ensures all farmers and creditors have been paid and a facility is still operating within the community really is a testament to the dedication of our staff and their commitment to do right by the people of South Dakota,” he continued.
PUC staff filed a request to open this docket on Feb. 24, 2020, after a regular inspection on Feb. 19 revealed Kingsburg did not meet minimum financial requirements for licensing and had not been candid about their financial condition and staff uncovered multiple past due delayed price contracts. At that time, staff was also informed that a bank with which Kingsburg did business had declined to continue working with the company in November of 2019.
“The Public Utilities Commission staff, on all levels, work very hard to protect our consumers. Here, they’ve protected both producers and creditors and I greatly appreciate their efforts,” said PUC Vice Chairperson Kristie Fiegen.
Kingsburg first appeared before the commission on Feb. 27, 2020, when the company’s accounts receivable was approximately $439,000 and the payables totaled approximately $991,000. At that time, commissioners accepted surrender of the grain buyer license and grain warehouse license of Kingsburg Grain and Feed, LP and ordered PUC staff to oversee all future transactions and the liquidation of assets. Staff then worked cooperatively with Kingsburg’s owner, as well as other interested parties, to achieve a positive outcome.
“This docket really highlights the importance of the PUC’s role in monitoring South Dakota’s grain industry and the work that the PUC staff does to reduce risk to producers. Through the licensing process and performing of inspections, our intention is to catch financial problems early on, identify issues and find solutions that don’t come at farmers’ expenses. This docket is a great example of that system working as intended,” stated Commissioner Gary Hanson.
Between February 2020 and February 2021, cooperating parties exercised several options to remedy Kingsburg’s insolvency issues including but not limited to performing a full audit, establishing remote financial monitoring, holding a public auction, and selling the facility.
The Kingsburg Grain and Feed docket can be viewed on the PUC’s website at www.puc.sd.gov, Commission Actions, Electric Dockets, 2020 Electric Dockets, GW20-002– In the Matter of Kingsburg Grain and Feed, LP.
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