(240 ILCS 40/Art. 20 heading)
(240 ILCS 40/20-5)
Sec. 20-5.
Failure.
Upon the failure of a licensee, the
Director has all powers as Trustee for the benefit of claimants as
established under this Code, including, but not limited to, the
power to do the following:
(a) Seize or otherwise gain possession or control of grain
assets
(except the Department may not seize or otherwise gain possession or control
of any equity asset on which there is a valid security interest or other lien
without the prior, written permission of the secured party or lien holder),
equity assets, and collateral and enforce the lien set forth in Section
20-10.
(b) Protect the grain assets, equity assets
(to the extent the Department has received the written permission of any
secured party or lien holder to take possession and control of the equity
asset),
and collateral
of or relating to a failed licensee in the possession or under the
control of the Department for the benefit of claimants, secured parties, and
lien holders.
(c) Liquidate and collect upon all grain assets, equity
assets
(except the Department may not liquidate and collect upon any equity asset on
which there is a valid security interest or other lien without the prior,
written permission of the secured party or the lien holder),
collateral and guarantees posted with the Department of or
relating to a failed licensee, and deposit the proceeds into
the Trust Account.
(d) Establish accounts in federally insured financial
institutions and hold all moneys received as trustee.
(e) Request the transfer of moneys from the Fund to the Trust
Account for the purpose of payment to claimants in accordance with
Section 25-10.
(f) Disburse the funds in the Trust Account in accordance
with this Code.
(Source: P.A. 89-287, eff. 1-1-96.)
(240 ILCS 40/20-10)
Sec. 20-10.
Lien on grain assets and equity assets.
(a) A statutory lien shall be imposed on all grain assets and equity assets
in favor of and to secure payment of obligations of the licensee to:
This statutory lien arises, attaches,
and is perfected at the date of delivery of grain, and is at that time deemed
assigned by the operation of this Code to the Department.
(b) The lien on grain assets created under this Section shall be
preferred and prior to any other lien, encumbrance, or security interest
relating
to those assets described in the definition of "grain assets"
in Section 1-10, regardless of the time the other lien, encumbrance, or
security interest attached or became perfected. The lien on equity assets
created
under this Section shall also be preferred and prior to any
other lien, encumbrance, or security interest relating to "equity assets"
as defined
in Section 1-10.
The lien on equity assets created under this Section, however, shall be
subordinate and
subject to any other lien, encumbrance, or security interest relating to
"equity assets" to the extent a creditor has a valid security
interest
in or other valid lien on the property that was perfected prior to the date
of
failure of the licensee; provided, however, that a creditor is not deemed to
have a valid security
interest or other valid lien on property if (i) the property can be directly
traced as being from the sale of grain by the licensee or failed licensee; (ii)
the security interest was taken as additional collateral on account of an
antecedent debt owed to the creditor; and (iii) the security interest or other
lien was perfected (A) on or within 90 days before the date of failure of the
licensee or (B) when the creditor is a related person, within one year of the
date of failure of the licensee.
(c) To the extent any portion of this Code conflicts with any
portion of the Uniform Commercial Code,
the provisions of this Code control.
(d) If an adversarial proceeding is commenced to
recover "grain assets" or "equity assets" upon which a
lien created under this Section is imposed and if the Department declines to
take part in that adversarial proceeding, the Department, upon application
to the Director by any claimant, shall assign to the claimant
the statutory lien to permit the claimant to pursue the lien in the
adversarial proceeding, but only if the assignment and adversarial proceeding
will
not delay the Department's liquidation and distribution of
grain assets, equity assets, collateral, and guarantees, including proceeds
thereof, to all claimants holding valid
claims.
(Source: P.A. 93-225, eff. 7-21-03.)
(240 ILCS 40/20-15)
Sec. 20-15.
Liquidation procedures.
When a licensee
experiences a failure, the Department has the authority to and shall:
(a) Immediately post notice at all locations of the failed
licensee stating that the licensee has experienced a failure and
that the license has been terminated and is no longer effective.
(b) Immediately take physical control and possession of the
failed licensee's facility, including but not limited to all
offices and grain storage facilities, books, records, and any other
property necessary or desirable to liquidate grain assets and equity assets.
(c) Give public notice and notify all known potential
claimants by certified mail of the licensee's
failure and the processes necessary to file grain claims with the
Department as set forth in Section 25-5.
(d) Perform an examination of the failed licensee.
(e) Seize and take possession of, protect, liquidate, and collect upon
all grain
assets, collateral, and guarantees of or relating to the failed
licensee and deposit the proceeds into the Trust Account. If at any time it
appears, however, in the
judgment of the Department that the costs of seizing and taking possession of,
protecting, liquidating, and collecting upon any or all of the grain
assets,
collateral, and guarantees equals or exceeds the expected recovery
to the Department, the Department may elect not to pursue
seizing and taking possession of, protecting, liquidating, and collecting
upon any or all
of
the assets.
(f) Seize, take possession of, protect, liquidate, and collect upon the
equity
assets of the failed licensee and deposit the proceeds into the Trust
account if the
Department has first obtained the written consent of all applicable secured
parties or lien holders,
if any. If at any time it appears, however,
in the judgment of the
Department that the costs of seizing and taking possession of, protecting,
liquidating, and
collecting upon any or all of the equity assets equals or exceeds
the expected recovery to the Department, the Department may
elect not to pursue seizing and taking possession of, protecting,
liquidating, and
collecting upon any or all of the equity assets. If the
Department does not otherwise pursue seizing and taking possession of,
protecting, liquidating, and
collecting upon any of the equity assets, the Department may bring or
participate in any liquidation or collection proceedings involving
the applicable secured parties or other interested party, if
any, and shall have the rights and remedies provided by law, including the
right to enforce its lien by any available judicial procedure.
If an applicable secured party or lien holder does not consent to the
Department seizing, taking possession of, liquidating, or collecting upon the
equity assets, the secured party or lien holder shall have the rights and
remedies provided by law or by agreement with the licensee or failed licensee,
including the right to enforce its security interest or lien by any available
judicial procedure.
(g) Make available on demand to an applicable secured party or lien holder
the equity asset, to the extent the Department seized or otherwise
gained possession or control of the equity asset, but the secured party or lien
holder does not consent to the Department liquidating and collecting upon the
equity asset.
(Source: P.A. 93-225, eff. 7-21-03.)
(240 ILCS 40/20-20)
Sec. 20-20. Liquidation expenses; Asset Preservation Account.
(a) The Trustee shall pay from the Trust Account all
reasonable expenses incurred by the trustee on or after the date of failure in
reference to seizing, preserving, and liquidating the grain assets,
equity assets, collateral, and guarantees of or relating to a failed
licensee,
including, but not limited to, the hiring of temporary field
personnel, equipment rental, auction expenses, mandatory commodity check-offs,
and clerical
expenses.
(b) Except as to claimants holding valid claims, any
outstanding indebtedness of a failed licensee that has accrued
before the date of failure shall not be paid by the Trustee and
shall represent a separate cause of action of the creditor against
the failed licensee.
(c) The Trustee shall report all expenditures paid from the
Trust Account to the Corporation at least annually.
(d) To the extent assets are available under subsection (g) of Section
25-20 and upon presentation of documentation satisfactory to the Trustee, the
Trustee shall transfer from the Trust Account to the Regulatory Fund an amount
not to exceed the expenses incurred by the Department in performance of its
duties under Article 20 of this Code, in reference to the failed licensee.
(e) The Department shall establish and maintain an Asset Preservation Account as provided in Section 205-410 of the Department of Agriculture Law of the Civil Administrative Code of Illinois that shall contain a maximum of $50,000. The funds in the Asset Preservation Account are to be used solely by the Trustee for the reasonable expenses incurred by the Department on or after the date of failure for preserving and liquidating grain assets, equity assets, collateral, and guarantees of or relating to a failed licensee, provided that the Department has made a determination that the benefit of preserving and liquidating the grain assets, equity assets, collateral, and guarantees exceeds the anticipated costs of the preservation and liquidation, and only to the extent that all liquid and available moneys in the Grain Indemnity Trust Account relating to the particular failure have been exhausted. The Asset Preservation Account shall be funded by the income earned on the assets in the Fund. The income must be transferred to the Asset Preservation Account on a monthly basis, within 10 business days after the end of each calendar month, and to the extent necessary to maintain the $50,000 balance. The Trustee, or his or her designee, must file a report of all receipts by and disbursements from the Asset Preservation Account with the Board prior to each meeting of the Board.
(Source: P.A. 93-225, eff. 7-21-03; 94-54, eff. 1-1-06.)
(240 ILCS 40/20-25)
Sec. 20-25.
Refusal of licensee to allow liquidation.
(a) If, after a failure, the failed licensee does not
transfer control of the grain assets to the Trustee, the Director
may, in conjunction with the authority granted in this Code and in
Section 205-410 of the Department of Agriculture Law (20 ILCS
205/205-410), file a
complaint and apply to a court of competent jurisdiction for a
temporary restraining order, a preliminary injunction, or a
permanent injunction to be entered without bond to carry out the
provisions of this Code.
(b) If a party seeks relief from a court of competent
jurisdiction that would enjoin, restrain, stay, or otherwise
resist either (1) an administrative order of the Department that suspends,
revokes, or denies renewal of a license under this Code or
(2) an action brought by the Department relating to
liquidation of a licensee, the court shall require the party
requesting the relief to provide a bond as provided for in
the Code of Civil Procedure. The bond shall be in an amount
adequate to assure that all producers and depositors will be
paid while the licensee is operating following suspension,
revocation, or denial of renewal of a license under the judicial relief for
grain sold to or stored with the licensee. The bond shall be in a
minimum amount sufficient to satisfy all existing grain
obligations of the licensee for grain purchased, sold, or
stored. In setting the amount of the bond, the court shall
consider increasing the amount of the bond based upon a
consideration of other factors, including, but not limited to,
the total dollar amount of grain purchased annually by the
licensee and the value of the storage obligations of the
licensee.
(Source: P.A. 91-239, eff. 1-1-00.)