Illinois Compiled Statutes
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240 ILCS 40/20-10
(240 ILCS 40/20-10)
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:
(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
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
under this Section shall also be preferred and prior to any
other lien, encumbrance, or security interest relating to "equity assets"
in Section 1-10.
The lien on equity assets created under this Section, however, shall be
subject to any other lien, encumbrance, or security interest relating to
"equity assets" to the extent a creditor has a valid security
in or other valid lien on the property that was perfected prior to the date
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
not delay the Department's liquidation and distribution of
grain assets, equity assets, collateral, and guarantees, including proceeds
thereof, to all claimants holding valid
(Source: P.A. 93-225, eff. 7-21-03.)