411.800. Definitions--statutory lien on grain and grain-related assets for benefit of depositors.
Definitions--statutory lien on grain and grain-related assets forbenefit of depositors.
411.800. 1. As used in this section, "failure" means any of thefollowing involving a licensed or unlicensed grain warehouseman:
(1) An inability to financially satisfy claimants;
(2) A public declaration of insolvency;
(3) A revocation of license with outstanding grain storage obligations;
(4) Refusal to redeliver stored grain where a good faith dispute doesnot exist;
(5) Neglect to apply for license renewal without first settling alloutstanding grain storage obligations;
(6) Denial of license renewal application; or
(7) Voluntarily surrendering a warehouse license without first settlingall outstanding grain storage obligations.
2. As used in this section, "grain or grain-related assets" involving afailed warehouseman means any of the following:
(1) All grain owned or stored, including grain in transit shipped by thefailed warehouseman, but not yet paid for;
(2) Grain held on storage in the name of or for the account of thewarehouseman at any other warehouse;
(3) Proceeds from the sale of grain due or to become due;
(4) The equity less any secured financing directly associated therewithin assets in hedging or speculative margin accounts held by commodityexchanges or agents representing the exchanges, and any moneys due or tobecome due less any secured financing directly associated therewith from anytransactions on the exchanges;
(5) Any other unencumbered funds, property, or equity in funds orproperty, wherever located, that can be directly traced to the sale of grainby the failed warehouseman, provided both that the funds, property, or equityin funds or property shall not be considered to be encumbered unless theencumbrance results from good and valuable considerations advanced by anysecured party on a good faith basis and that the encumbrance is not the resultof the taking of funds, property, or equity in funds or property as additionalcollateral for an antecedent debt.
3. A lien shall exist on all grain and grain-related assets of a failedwarehouseman in favor of any of the following:
(1) Depositors, including lenders, who possess negotiable warehousereceipts covering grain owned by the warehouseman; and
(2) Depositors who possess written evidence of ownership disclosing astorage obligation of the warehouseman.
4. The lien which shall secure all claims described in subsection 3 ofthis section shall arise at the time of commencement of the storageobligation, or when funds are advanced by the lender, and shall terminate whenthe liability of the warehouseman to the claimant is discharged, provided thatthe priority of each lien among the respective claimants shall not relate tothe date the claim arises. The lien claims of all claimants shall beconsidered to be assigned by operation of this section to the department ofagriculture, and in the event of a failure and subsequent liquidation, thelien shall transfer over to assets or proceeds of assets either received orliquidated by the department of agriculture.
5. In the event of a failure, the director shall enforce the lien claimsand allocate the proceeds as follows against all grain and grain-relatedassets for the benefit of the following:
(1) Depositors, including lenders, who possess negotiable warehousereceipts covering grain owned by the warehouseman;
(2) Depositors who possess written evidence of ownership disclosing astorage obligation of the warehouseman.
6. In the event that any adversary proceeding is commenced to recovergrain or grain-related assets upon which the lien imposed in this section isimposed and the department declines to enter the proceeding, the director,upon application to him by any claimant, shall assign to the claimant theapplicable lien to permit the claimant to pursue his lien in the adversaryproceeding to the extent the action will not delay the resolution of theproceeding, the prompt liquidation of the assets, or the ultimate distributionof the assets to all claimants.
(L. 1997 H.B. 211)Effective 4-2-97