§ 20-10 — Lien on grain assets and equity assets

Illinois § 20-10

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 240: WAREHOUSES
• Act 240 ILCS 40/: Grain Code.
• Art.: Article 20 - Failure; Liquidation

Text

(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: (1) A person, including, without limitation, a lender: (A) who possesses warehouse receipts issued from an Illinois warehouse location covering grain owned or stored by a warehouseman; (B) who has other written evidence of a storage obligation of a warehouseman issued from an Illinois warehouse location in favor of the holder, including, but not limited to, scale tickets, settlement sheets, and ledger cards; or (C) who has loaned money to a warehouseman and was to receive a warehouse receipt from an Illinois location as security for that loan, who surrendered warehouse receipts as a part of a grain sale at an Illinois location, or who delivered grain out of storage with the warehouseman as a part of a grain sale at an Illinois location and: (i) the grain dealer or warehouseman experienced a failure within 21 days thereafter, a warehouse receipt was not issued, and payment in full was not made; or (ii) written notice was given by the person to the Department within 21 days thereafter stating that a warehouse receipt was not issued and payment in full was not made. (2) A producer who possesses evidence of the sale at an Illinois location of grain delivered to that failed grain dealer, or its designee, and who was not paid in full. 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.

Legislative History

(Source: P.A. 93-225, eff. 7-21-03.)