PIERRE - The state Public Utilities Commission decided on June 19 that letters will be sent by certified mail to all known patrons of defunct Anderson Seed Co. of Redfield.
The commission is taking the unusual step of using certified mail as an attempt to assure that all affected farmers who did business with the Redfield grain buyer are contacted.
The purpose of the letters is inform patrons they can make claims against the $100,000 bond that the company had posted before closing its doors because of financial problems.
PUC staff said 69 parties have been identified but some of them don't appear to have reason to submit claims.
Patrons will have 60 days to file claims on grain that was priced and sold but wasn't paid. The claim form will require information such as scale ticket number, date, kind of grain, bushels, price and names of lien holders. The form also will need to be signed and notarized.
Under the approved plan, the PUC plans to publish notices in the Farm Forum and the Redfield Press newspaper to draw attention to the claims process and filing period.
The PUC later will have a hearing on the claims submissions and then allocate the money. The distribution plan would be filed with Spink County Circuit Court.
Farmers lost an estimated $2.6 million when Anderson Seed went under. The $100,000 bond was in accordance with state law and allowed Anderson Seed to make up to $10 million of purchases.
Many of the deals between grain producers and Anderson Seed, however, were conducted under voluntary credit sale agreements that aren't protected by the bond requirement.
For the PUC's official explanation of the events involving Anderson Seed, visit puc.sd.gov/warehouse/andersonseed.aspx on the Internet.
The claims process was developed by Kara Semmler, a PUC lawyer, and Jim Mehlhaff, who oversees the PUC's grain warehouse division.
Commissioners Chris Nelson and Kristie Fiegen voted to accept the plan Tuesday, with the additional requirement that certified mail be used for contacting farmers.
You just want to protect your producers, Fiegen said.
She said the additional cost probably is worthwhile.
John Smith, the commission's chief lawyer, said certified mail can be a pain in the you know what for recipients because they must sign proof of delivery.
Smith said that a simpler process known as notice of delivery was used to contact customers in a telecommunications case four years ago.
He said there was very good luck in determining who didn't have letters delivered.
We ended up finding everybody, he said.
Fiegen responded that certified mail should be used this time.
Nelson and Fiegen are up for election this year. Democrats nominated former Rep. Nick Nemec of Holabird and Matt McGovern of Sioux Falls last weekend to oppose them on the November ballot.
Nemec and McGovern plan to use the Anderson Seed matter as a campaign issue.
The commission's third member, Gary Hanson, excused himself again on June 19 from the Anderson proceedings because a family member works for one of the banks involved.