By TIM ALEXANDER
Illinois Correspondent

SPRINGFIELD, Ill. — The Illinois Department of Agriculture’s (IDOA) Bureau of Warehouses announced they had helped facilitate the sale of financially-troubled Towanda Grain, Inc. on Monday morning, May 24.

Towanda Grain, located in Towanda in McLean County, was shuttered May 10 when state regulators took control of the co-op after “irregularities” were found in its financial records.

IDOA officials suspended Towanda Grain Co.’s dealer and warehousing licenses and took control of the co-op for violating financial provisions of the Illinois Grain Code, leading to the buyout.

Farmers who deposited grain or invested in the co-op are protected by the Illinois Grain Insurance Fund, though it won’t be necessary for the state to have to tap into the fund due to the sale, according to Stuart Selinger, IDOA Bureau of Warehouses chief.

“It came to our attention that there were some deficiencies in Towanda Grain Co.’s financial records which we cannot disclose at this time,” Selinger told Farm World shortly before the sale.

“We’ve been actively working with lenders and the board president (Mark Kraft) of Towanda Grain to find a resolution to this problem. We’re facilitating a sale and assisting them in that progression. It will soon be business as usual and the transition would be somewhat seamless, other than the unfortunate lost opportunity in the last (several) days for individuals to price their grain.”
A hearing scheduled for Monday morning during which Towanda Grain’s licenses were to be revoked by the IDOA was averted with the announcement of the sale of the elevator’s assets to Evergreen FS, a Bloomington, Ill.-based company that operates eight other grain elevators in McLean County.

The state will not have to liquidate the elevator’s assets to pay producers and investors since Evergreen FS agreed to assume the elevator’s outstanding grain obligations, the IDOA confirmed Monday.

“The Department of Agriculture worked very hard the past two weeks to help find a buyer for this facility,” said IDOA Director Tom Jennings, in a statement.

“We’re pleased an agreement has been reached that not only preserves a local market for grain produced in McLean County, but also protects the financial interests of farmers who had done business with the cooperative.”

Towanda Grain’s elevators hold 3 million bushels of grain and was owned by 100 producers and investors.

The co-op was contracted with Decatur-based ADM and AgRail, which owns a high-speed rail-loading terminal in Bloomington, according to the Bloomington Pantagraph.

Kraft told the Pantagraph that Towanda Grain notified the IDOA about discrepancies in their books after a monthly financial report was found to be inconsistent with the company’s balance sheet. Kraft also said the co-op’s general manager, who would have handled day-to-day operations, is no longer working for the elevator.

Selinger indicated Monday that the department’s investigation into the failure of Towanda Grain is ongoing, and that any evidence of criminal wrongdoing discovered by regulators will result in criminal prosecution.

Those affected by the closure of Towanda Grain Co. can contact the Bureau of Warehouses with their questions at 800-654-0882.