Article 2.--INSPECTING, SAMPLING, STORING, WEIGHING AND GRADING GRAIN; TERMINAL AND LOCAL WAREHOUSES
34-2,104.Deficit in grain stored in warehouse or grain handlingfacility; action by secretary forpossession; audit and investigation; temporary receiver; receivership.(a) Whenever it appears to the satisfaction of the secretary that a licensedwarehouseman doesnot have possessionof sufficient commodities to cover the outstanding receipts andscale tickets issued or assumed by the warehouseman or when a licensedwarehouseman refuses tosubmit records or property to a lawful examination, thesecretary maygive notice to the warehouseman to comply with all or any of the followingrequirements:
(1) Cover any existing shortage;
(2) give additional bond or letter of credit asrequested by the secretary;
(3) submit to any examination that the secretary considersnecessary.
If the warehouseman fails to comply with the terms ofthe noticewithin 24 hours from the date of its issuance or within suchfurther time as the secretary allows, thesecretary may petition thedistrict court of any county in which is located one of the principalplaces of business of the licensed warehouseman for an order authorizingthe department to take possession of and maintainall or aportion of any and all commodities located in the licensed warehouse orwarehouses of the warehouseman and all pertinent records and property.
Upon receipt of the secretary's verified petition settingforth thecircumstances of the warehouseman's failure to comply and further statingreasons why immediate possession and maintenance by thedepartment isnecessary for the protection of depositors, warehouse receipt holders orsureties, the court shall forthwith issue an order authorizing thedepartment to take immediate possession of and maintain the commodities,records and property for the purposes stated in thissection. A copy of the petition and order shall be sent to thewarehouseman.
(b) At any time within 10 days after thedepartment takespossession, the warehouseman may file with the court a response to thepetition of the secretary stating reasons why the departmentshould not beallowed to retain possession. The court shall set the matter for hearing ona date not less than five nor more than 15 days from the date of thefiling of the warehouseman's response. The order placing the department inpossession shall not be stayed nor set aside until the courtafter hearing determines that possession should be restored to thewarehouseman.
(c) Upon taking possession, the secretary shall givewritten notice of itsaction to the surety on the bond or the financial institution which issuedthe letter of credit of the warehouseman and may notify theholders of record, as shown by the warehouseman's records, of all receiptsand scale tickets issued for commodities, to present their receipts orscale tickets for inspection or to account for them. Thesecretary then maycause an audit and other investigation to be made of the affairsof the warehouse, especially with respect to the commodities in whichthere is an apparent shortage, to determine the amount of the shortage andcompute the shortage as to each depositor as shown in the warehouseman'srecords, if practicable. The secretary shall notify thewarehouseman and thesurety on the warehouseman's bond or the financial institution which issuedthe letter of credit of the approximate amountof the shortage and notifyeach depositor affected by the shortage by sending notice to the depositor'slastknown address as shown by the records of the warehouse.
The department shall retain possessionand continue maintenance of commodities, records and property underthis section until the warehouseman or the surety onthe warehouseman's bond or the financial institution which issued the letterof credit has satisfied the claims of all depositors or untilthe department is ordered by the court to surrenderpossession.
(d) If during or after the audit or other investigation provided for in thissection, or at any other time, the secretary has evidence thatthewarehouseman is insolvent or is unable to satisfy the claims of alldepositors, or the grain handling facility is operating without a validfederal or state license, the secretary shall forthwithpetition the district court foran order appointing a receiver, under article 13 of chapter 60 of the KansasStatutes Annotated, and amendments thereto, to operate or liquidate thebusiness of thewarehouseman or unlicensed facility in accordance with the law. Thepetition may be accompaniedby a verified application requesting that the court appoint thesecretaryto act as temporary receiver until a receiver is appointed. The court mayappoint the secretary as temporary receiver inan ex parte proceeding.
(e) While acting as temporary receiver, the secretary shallhave all thepowers of a receiver and may appoint a special deputy director to take chargeof the affairs of the warehouse until a receiver is appointed. The specialdeputy shall qualify, give bond and receive reasonable compensation asdeterminedby the secretary, subject to the approval of the districtcourt. The compensationshall be paid by the insolvent warehouse or unlicensed facility or,upon appointment of a receiver,may be allowed by the court as costs in the case.
(f) All necessary expenses incurred by the departmentorany receiver appointed under this section in carrying out the provisions ofthis section may be recovered from the warehouseman, owner or operator ofthe unlicensed grain handling facility in a separate civilaction brought by the secretary in the district court or mayberecovered at the same time and as a part of the seizure or receivershipaction filed under this section. As a part of the expenses so incurred,there is authorized to be included the cost of adequate liability insurancenecessary to protect the department, the receiver, andothers engaged in carrying out the provisions of this section.
(g) A receiver shall have five months from the date of the receiver'sappointment for the settlement and completion of the receivership. For causeshown, this period may be extended by the court, not exceeding three months ata time.
Article 2.--INSPECTING, SAMPLING, STORING, WEIGHING AND GRADING GRAIN; TERMINAL AND LOCAL WAREHOUSES
34-2,104.Deficit in grain stored in warehouse or grain handlingfacility; action by secretary forpossession; audit and investigation; temporary receiver; receivership.(a) Whenever it appears to the satisfaction of the secretary that a licensedwarehouseman doesnot have possessionof sufficient commodities to cover the outstanding receipts andscale tickets issued or assumed by the warehouseman or when a licensedwarehouseman refuses tosubmit records or property to a lawful examination, thesecretary maygive notice to the warehouseman to comply with all or any of the followingrequirements:
(1) Cover any existing shortage;
(2) give additional bond or letter of credit asrequested by the secretary;
(3) submit to any examination that the secretary considersnecessary.
If the warehouseman fails to comply with the terms ofthe noticewithin 24 hours from the date of its issuance or within suchfurther time as the secretary allows, thesecretary may petition thedistrict court of any county in which is located one of the principalplaces of business of the licensed warehouseman for an order authorizingthe department to take possession of and maintainall or aportion of any and all commodities located in the licensed warehouse orwarehouses of the warehouseman and all pertinent records and property.
Upon receipt of the secretary's verified petition settingforth thecircumstances of the warehouseman's failure to comply and further statingreasons why immediate possession and maintenance by thedepartment isnecessary for the protection of depositors, warehouse receipt holders orsureties, the court shall forthwith issue an order authorizing thedepartment to take immediate possession of and maintain the commodities,records and property for the purposes stated in thissection. A copy of the petition and order shall be sent to thewarehouseman.
(b) At any time within 10 days after thedepartment takespossession, the warehouseman may file with the court a response to thepetition of the secretary stating reasons why the departmentshould not beallowed to retain possession. The court shall set the matter for hearing ona date not less than five nor more than 15 days from the date of thefiling of the warehouseman's response. The order placing the department inpossession shall not be stayed nor set aside until the courtafter hearing determines that possession should be restored to thewarehouseman.
(c) Upon taking possession, the secretary shall givewritten notice of itsaction to the surety on the bond or the financial institution which issuedthe letter of credit of the warehouseman and may notify theholders of record, as shown by the warehouseman's records, of all receiptsand scale tickets issued for commodities, to present their receipts orscale tickets for inspection or to account for them. Thesecretary then maycause an audit and other investigation to be made of the affairsof the warehouse, especially with respect to the commodities in whichthere is an apparent shortage, to determine the amount of the shortage andcompute the shortage as to each depositor as shown in the warehouseman'srecords, if practicable. The secretary shall notify thewarehouseman and thesurety on the warehouseman's bond or the financial institution which issuedthe letter of credit of the approximate amountof the shortage and notifyeach depositor affected by the shortage by sending notice to the depositor'slastknown address as shown by the records of the warehouse.
The department shall retain possessionand continue maintenance of commodities, records and property underthis section until the warehouseman or the surety onthe warehouseman's bond or the financial institution which issued the letterof credit has satisfied the claims of all depositors or untilthe department is ordered by the court to surrenderpossession.
(d) If during or after the audit or other investigation provided for in thissection, or at any other time, the secretary has evidence thatthewarehouseman is insolvent or is unable to satisfy the claims of alldepositors, or the grain handling facility is operating without a validfederal or state license, the secretary shall forthwithpetition the district court foran order appointing a receiver, under article 13 of chapter 60 of the KansasStatutes Annotated, and amendments thereto, to operate or liquidate thebusiness of thewarehouseman or unlicensed facility in accordance with the law. Thepetition may be accompaniedby a verified application requesting that the court appoint thesecretaryto act as temporary receiver until a receiver is appointed. The court mayappoint the secretary as temporary receiver inan ex parte proceeding.
(e) While acting as temporary receiver, the secretary shallhave all thepowers of a receiver and may appoint a special deputy director to take chargeof the affairs of the warehouse until a receiver is appointed. The specialdeputy shall qualify, give bond and receive reasonable compensation asdeterminedby the secretary, subject to the approval of the districtcourt. The compensationshall be paid by the insolvent warehouse or unlicensed facility or,upon appointment of a receiver,may be allowed by the court as costs in the case.
(f) All necessary expenses incurred by the departmentorany receiver appointed under this section in carrying out the provisions ofthis section may be recovered from the warehouseman, owner or operator ofthe unlicensed grain handling facility in a separate civilaction brought by the secretary in the district court or mayberecovered at the same time and as a part of the seizure or receivershipaction filed under this section. As a part of the expenses so incurred,there is authorized to be included the cost of adequate liability insurancenecessary to protect the department, the receiver, andothers engaged in carrying out the provisions of this section.
(g) A receiver shall have five months from the date of the receiver'sappointment for the settlement and completion of the receivership. For causeshown, this period may be extended by the court, not exceeding three months ata time.
Article 2.--INSPECTING, SAMPLING, STORING, WEIGHING AND GRADING GRAIN; TERMINAL AND LOCAL WAREHOUSES
34-2,104.Deficit in grain stored in warehouse or grain handlingfacility; action by secretary forpossession; audit and investigation; temporary receiver; receivership.(a) Whenever it appears to the satisfaction of the secretary that a licensedwarehouseman doesnot have possessionof sufficient commodities to cover the outstanding receipts andscale tickets issued or assumed by the warehouseman or when a licensedwarehouseman refuses tosubmit records or property to a lawful examination, thesecretary maygive notice to the warehouseman to comply with all or any of the followingrequirements:
(1) Cover any existing shortage;
(2) give additional bond or letter of credit asrequested by the secretary;
(3) submit to any examination that the secretary considersnecessary.
If the warehouseman fails to comply with the terms ofthe noticewithin 24 hours from the date of its issuance or within suchfurther time as the secretary allows, thesecretary may petition thedistrict court of any county in which is located one of the principalplaces of business of the licensed warehouseman for an order authorizingthe department to take possession of and maintainall or aportion of any and all commodities located in the licensed warehouse orwarehouses of the warehouseman and all pertinent records and property.
Upon receipt of the secretary's verified petition settingforth thecircumstances of the warehouseman's failure to comply and further statingreasons why immediate possession and maintenance by thedepartment isnecessary for the protection of depositors, warehouse receipt holders orsureties, the court shall forthwith issue an order authorizing thedepartment to take immediate possession of and maintain the commodities,records and property for the purposes stated in thissection. A copy of the petition and order shall be sent to thewarehouseman.
(b) At any time within 10 days after thedepartment takespossession, the warehouseman may file with the court a response to thepetition of the secretary stating reasons why the departmentshould not beallowed to retain possession. The court shall set the matter for hearing ona date not less than five nor more than 15 days from the date of thefiling of the warehouseman's response. The order placing the department inpossession shall not be stayed nor set aside until the courtafter hearing determines that possession should be restored to thewarehouseman.
(c) Upon taking possession, the secretary shall givewritten notice of itsaction to the surety on the bond or the financial institution which issuedthe letter of credit of the warehouseman and may notify theholders of record, as shown by the warehouseman's records, of all receiptsand scale tickets issued for commodities, to present their receipts orscale tickets for inspection or to account for them. Thesecretary then maycause an audit and other investigation to be made of the affairsof the warehouse, especially with respect to the commodities in whichthere is an apparent shortage, to determine the amount of the shortage andcompute the shortage as to each depositor as shown in the warehouseman'srecords, if practicable. The secretary shall notify thewarehouseman and thesurety on the warehouseman's bond or the financial institution which issuedthe letter of credit of the approximate amountof the shortage and notifyeach depositor affected by the shortage by sending notice to the depositor'slastknown address as shown by the records of the warehouse.
The department shall retain possessionand continue maintenance of commodities, records and property underthis section until the warehouseman or the surety onthe warehouseman's bond or the financial institution which issued the letterof credit has satisfied the claims of all depositors or untilthe department is ordered by the court to surrenderpossession.
(d) If during or after the audit or other investigation provided for in thissection, or at any other time, the secretary has evidence thatthewarehouseman is insolvent or is unable to satisfy the claims of alldepositors, or the grain handling facility is operating without a validfederal or state license, the secretary shall forthwithpetition the district court foran order appointing a receiver, under article 13 of chapter 60 of the KansasStatutes Annotated, and amendments thereto, to operate or liquidate thebusiness of thewarehouseman or unlicensed facility in accordance with the law. Thepetition may be accompaniedby a verified application requesting that the court appoint thesecretaryto act as temporary receiver until a receiver is appointed. The court mayappoint the secretary as temporary receiver inan ex parte proceeding.
(e) While acting as temporary receiver, the secretary shallhave all thepowers of a receiver and may appoint a special deputy director to take chargeof the affairs of the warehouse until a receiver is appointed. The specialdeputy shall qualify, give bond and receive reasonable compensation asdeterminedby the secretary, subject to the approval of the districtcourt. The compensationshall be paid by the insolvent warehouse or unlicensed facility or,upon appointment of a receiver,may be allowed by the court as costs in the case.
(f) All necessary expenses incurred by the departmentorany receiver appointed under this section in carrying out the provisions ofthis section may be recovered from the warehouseman, owner or operator ofthe unlicensed grain handling facility in a separate civilaction brought by the secretary in the district court or mayberecovered at the same time and as a part of the seizure or receivershipaction filed under this section. As a part of the expenses so incurred,there is authorized to be included the cost of adequate liability insurancenecessary to protect the department, the receiver, andothers engaged in carrying out the provisions of this section.
(g) A receiver shall have five months from the date of the receiver'sappointment for the settlement and completion of the receivership. For causeshown, this period may be extended by the court, not exceeding three months ata time.
