The Iowa Department of Agriculture says three companies that filed claims against bankrupt ethanol producer Verasun look to be eligible for payment from a fund set up as a sort of insurance for farmers. The Grain Indemnity Fund was created in 1986 and Ag Secretary Bill Northey says not all claims against Verasun qualified for payment from the fund.
He says some applications for the indemnity fund were prior to six months when it was valid to file claims and they were deemed not to be valid, while the three approved came 20 days prior to the bankruptcy. The three claims that look like they will be paid are for a little over $25,000. Northey says the other claims total over $150,000 and they’ll have to try and get their money in other ways.
Northey says they’ll have to stand in line with other creditors in bankruptcy court to see if they can get paid back and he says that looks tough right now. The indemnity fund was created by assessing a fee to grain dealers back when the fund was created, and now is assessed to new dealers. The fund has a balance of eight-point-one million dollars.
Northey says that’s about where the fund needs to be, with a minimum of six million dollars. Northey says they’ve paid out some 13-million dollars over the years and have recovered about eight million dollars on the 13-million in claims. Northey says Verasun still has four operating ethanol plants, including those in Fort Dodge, Charles City and Albert City.
Northey says it’s important that they stay in business as long as they are able to continue paying their bills, as farmers still have contracts for corn that’re above the prices now, and they need to be able to sell some of their corn. Northey says Verasun will be able to keep its grain dealer license as long as it is able to continue paying the contracts for corn.