Farmers who were owed money when API Grain Processors Ltd. of Red Deer went into receivership will be paid from the company’s Canadian Grain Commission bond.
The company carried a bond of $750,000. When it went into receivership Dec. 3, 2002, it owed eligible producers $751,307.
Four claims worth $31,052 were ineligible because producers didn’t cash their cheques before the 30-day limit allowed under grain regulations.
“The fact that almost all farmers received close to full compensation is very good news,” said CGC chief commissioner Chris Hamblin.
API Grain Processors remains licensed by the grain commission under the court’s receivership order.
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Grain companies licensed by the grain commission are required to post security to cover their debts to farmers, although coverage is limited.
Producers are protected for 90 days after they deliver their grain. If a company refused or fails to pay producers in that time, they have a right to make a claim against security. If producers wait more than 90 days to get paid, they are not covered.
Grain held in condominium storage is not covered by security, but once the grain is transferred to the company and an official elevator receipt is issued, the 90-day protection period begins.
