A Bon Homme County grain-handling business has submitted documents to surrender its grain buyer and grain warehousing licenses, according to the South Dakota Public Utilities Commission found the company is financially insolvent.
Owners of Kingsburg Grain and Feed, which is located about 6 miles northwest of Springfield, signed agreements to give up their licenses to operate grain-handling businesses.
An affidavit from the state’s grain warehouse program manager, Cody Chambliss, said the PUC met with Kingsburg’s accountant and bankers in June 2019 regarding the business’s financing concerns and licensing requirements, and a full inspection of the business was held weeks later with Kingsburg and its financial service providers.
On Feb. 19, inspections showed that Kingsburg had multiple past due delayed price contracts that were past their pricing date. The inspector also reported that Kingsburg was no longer financing with its bank and the grain handler no longer met the minimum financial requirements needed to hold a grain handling license.
As a state-licensed grain warehouse, the business is required to post bond “equal to one-half the local market value of the customer-owned grain stored at all their locations, and a minimum of $25,000,” according to PUC regulations.
Each state-licensed grain buyer is required to post a minimum $50,000 bond. The bond requirement is determined by a company's average purchases over a three-year period.
Chambliss wrote that PUC staff has worked with Kingsburg to better its financial position, but reported that Kingsburg had not “been candid about their financial condition.”
“While they have less outstanding payables to date than when we began working with them, it has become clear to me that we have made as much improvement as we are able to make,” Chambliss wrote.
The PUC has filed a petition to revoke the buying and warehousing licenses and is set to seek receivership. The commission plans to meet at 2:30 p.m. Thursday in Pierre to consider the next actions regarding the business.
Kingsburg’s website says it has been in business since 1969, when it was founded by Robert Shutt. The business has 10 employees and provides grain, feed, chemical and fertilizer services. The affidavit says Kingsburg has been leasing its facility to another company since Oct. 1, and that all grain purchases from that date until now have been under the lessor’s license. The PUC noted that Monday’s filing only affects Kingsburg’s business.
Documents filed with the PUC and dated as of Monday show that Shutt has 90 percent ownership of the business, and is listed as manager. Sheila Shutt is listed as holding 10 percent ownership and is listed as a partner.