LITTLE ROCK, Ark. -- New developments have come about in the bankruptcy and lawsuit cases involving Turner Grain, the broker business that defaulted in 2014, leaving many farmers in the lurch.
A former employee of Turner Grain has claimed in court documents that the owners were operating the business in a way that made failure inevitable. And those who say they're still owed money for grain they delivered and contracts they filled are now receiving letters saying the money they've received might have to be paid back.
The hum of machinery nearly drowns out Jim Mead as he watches dust from the rice inside jitter and sift through the mill.
"This rice is way too light," he said. "Which is not really good from the farmer's perspective."
Mead is accustomed to sorting through the good and bad, but over the past two years of dealing with Turner Grain going bust, it's been mostly bad.
"These people are already victims," he said. "It's just like they're getting hit again."
Former customers of the grain broker business that went under have received "preference letters" two years after Turner Grain filed bankruptcy in 2014. Those letters detail that they received payments made within 90 days before the bankruptcy and are being reviewed as possibly preferential payments, meaning those funds might have to be paid back. Based on farmers and others we've spoke with, it could total millions.
"They [these farmers] have probably either already lost everything or re-mortgaged everything. They don't have money to be putting back into this," Mead said. "I haven't gotten a letter myself. But I anticipate I will be."
A new trustee has taken over in the Turner Grain bankruptcy after the former trustee resigned. Mead is afraid those who are still owed money, for grain they delivered but were never paid for, will have to pay back into the pot.
We've reached out to the new trustee in the case to see if he could explain why there was such a delay in individuals receiving these claw back letters. We also left a message this afternoon to see if he could explain how the process would work, and how it would be determined who would have to pay those funds back and how much is expected to be retrieved. We will update this article accordingly.
"If people have to start paying money back in it'll finish them off. The majority have already lost everything," Mead said. "And if they do pay in, I doubt they'll see 10 percent of it come back to them."
At this point, a federal investigation is supposedly underway. But no charges have been brought against owners Jason Coleman or Dale Bartlett.
"It feels bad that we still don't have anybody who is helping us - we're basically out here on our own," Mead said.
In an affidavit filed Monday in a lawsuit against Turner Grain and others, a former employee alleges Coleman and Bartlett used for personal benefit a money market account meant to hold farmers' money.
According to the employee, Turner Grain's owners used that money to purchase property, equipment or other expenditures. She also alleges that Coleman and Bartlett promised higher prices to farmers than they actually had contracted from buyers in order to generate business. In the affidavit, she claims Turner Grain would essentially rob Peter to pay Paul in referring to the co-mingling of funds between multiple entities that had been set up, all while seeing losses outweigh gains and bank accounts fall short.
According to the affidavit, it was inevitable that Turner Grain would fail.
Lisa Ballard, the attorney for Jason Coleman, responded to the affidavit on Tuesday. She said by phone, "The affidavit is inaccurate. We will be filing a rebuttal in the appropriate place at the appropriate time. We will not try our case in the media."
"Statements she's making is telling what everyone has known just seems like it keeps getting swept under the table," Mead said of the affidavit. "These are things many of us already knew."
Mead continues to sift through the mess that started for him and dozens of others two years ago. But he's wondering if they will ever be paid what he deems their due in the fallout of what he considers the biggest Ponzi scheme in the state's history.
"We need help. Justice. We need our money but we definitely need justice," he said. "I just wonder where all those people and politicians are who talked about how the ag industry is the backbone of Arkansas. Where are they now?"
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