1. The provisions of this chapter and all regulations promulgated under this chapter that apply to surety companies and surety bonds shall also apply to certificates of deposit and irrevocable letters of credit. Any certificate of deposit submitted in lieu of a surety bond required under this chapter shall be filed with the director as trustee for the benefit of all persons storing grain with the grain warehouseman. The certificate of deposit will be kept in the custody of the director.

2. A grain warehouseman may, in lieu of the bond required under this chapter, submit an irrevocable letter of credit, payable to the director for the benefit of claimants, and issued by a federally or state chartered bank. The director may refuse to accept a letter of credit in lieu of the bond required by this chapter if the director finds that the issuing bank is or may become insolvent, or for any other reason may be unable to honor the terms of the letter of credit. The director may require an issuing bank to submit evidence of its financial condition, and the director may seek the cooperation of the division of finance in evaluating the financial condition of an issuing bank. The director shall promulgate all necessary regulations pertaining to certificates of deposit, bonds, and irrevocable letters of credit.

Terms Used In Missouri Laws 411.277

  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Claimant: any person or depositor who requests, but does not receive, payment for, or redelivery of, grain stored at a warehouse because the warehouseman fails or refuses to make such payment or redelivery. See Missouri Laws 411.026
  • Director: the director of the Missouri department of agriculture or his designated representative. See Missouri Laws 411.026
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Grain: all grains for which standards have been established under the United States Grain Standards Act (Sections 71 to 87 of Title 7, United States Code), and any other agricultural commodities, seeds and vegetable oils prescribed by the director by regulation, except the term "grain" shall not include those commodities deemed not to be grain pursuant to section 411. See Missouri Laws 411.026
  • Receipt: a grain warehouse receipt, whether negotiable or nonnegotiable, issued under this chapter. See Missouri Laws 411.026
  • State: when applied to any of the United States, includes the District of Columbia and the territories, and the words "United States" includes such district and territories. See Missouri Laws 1.020
  • Trustee: A person or institution holding and administering property in trust.
  • warehouseman: any person who owns, controls, operates or manages any warehouse whether such owner resides within the state or not. See Missouri Laws 411.026

3. Upon written demand of the director for payment, the bank shall either pay over to the director the sum demanded, up to the full face amount of the irrevocable letter of credit, or shall deposit the sum demanded in an escrow account at the highest rate of interest available. When a bank pays the director upon demand, the director shall either interplead the sum in court or hold an administrative hearing for the determination of the liability of the bank and the validity of the claims against the irrevocable letter of credit, and upon the conclusion thereof, the director shall distribute the irrevocable letter of credit proceeds accordingly. The determination of the director shall be final, subject to the licensee’s or claimant‘s right to appeal to the circuit court pursuant to the provisions of chapter 536. Refusal or failure of the issuing bank to pay the sum demanded to the director within three days of the bank’s receipt of such written demand shall result in a penalty assessment of ten percent of the amount demanded, up to the full face amount of the irrevocable letter of credit, per week until the amount demanded and the penalty are paid. When funds have been received, and the director or court determines that the bank is not liable for claims against the irrevocable letter of credit, the director shall return to the bank the sum paid to the director and all accumulated interest earned, minus any penalties due or paid. In the event that the liability is less than the sum demanded, the director shall return the appropriate pro rata portion of the funds received, and interest earned as applicable.

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