NDPSC files motion on VeraSun Hankinson grain elevator

By Craig A. Johnson | August 10, 2009
Report posted Sept. 11, 2009, at 10:43 a.m. CST

North Dakota's Public Service Commission will seek permission to pursue an insolvency case at the state level against VeraSun Energy Corp.'s grain storage facilities at Hankinson, in southeastern North Dakota.

Specifically, the Public Service Commission asks in the filing that the grain elevator "may be liquidated and distributed to certain farmers who allege they have not been paid for grain they delivered to a public warehouse facility operated by [VeraSun Hankinson, LLC.]" While the case proceeds, the commission wants a federal bankruptcy court order allowing it to be appointed trustee of the grain elevator where the corn was stored.

Liberty Mutual Insurance Co., VeraSun's bonding company, objects to the move on the grounds that the state insolvency case conflicts with the liquidation process proposed by VeraSun under federal bankruptcy law. However, Public Service Commissioner Tony Clark said Liberty recently agreed to back the commission's request if the PSC agreed not to make an immediate claim on the plant's $380,000 bond.

"It allows us to really get all of our information in order, so that we know how much, ultimately, that producers are to be paid," Clark said. "It lets us move the ball down the field, but it will not, at least at this time, allow us to release money to producers."

VeraSun filed for Chapter 11 protection in October 2008.