Monthly Archives: May 2012

Food Borne Illness Liability Forces Jensen Farms to File for Ch. 11 Bankruptcy Protection

On May 25, 2012, Jensen Farms, which is a general partnership, filed for Ch. 11 bankruptcy protection in Colorado.  With a list of the 20 largest creditors dominated by contingent, unliquidated and disputed estate claims, it is clear that wrongful death claims and other food safety related liabilities played a major role in the demise  of Jensen Farms.

The Produce News reported that Jensen Farms filed bankruptcy with $4.8 million in revenues in 2011, $2.1 million in current assets, $2.5 million in liabilities and an outstanding A/R from Frontera Produce in excess of $1.6 million.  The article went on to report that the bankruptcy should free up millions of dollars in insurance money to help fund settlements in numerous Listeria related wrongful death actions.  The Produce News – Jensen Farms Files for Bankruptcy Protection

This case will be closely watched as it is a glaring example of how important food safety issues are to the very sustainability and viability of a food company’s operations! 

PACA Trust Litigation Alert

PACA Trust Litigation Alert

PACA Trust Litigation Alert

On May 22, 2012, a civil action was filed in Hawaii against Paradise Corner LLC in an effort to collect approximately $164,950.00 in an alleged PACA trust debt.  

On May 23, 2012, a civil action was filed in California against Santanas Grill, Inc. d/b/a Fresh MXN Food in an effort to collect approximately $64,000.00 in alleged PACA trust debt.  

On May 24, 2012, a civil action was filed in Alabama against Atlanta Tomato LLC in an effort to collect approximately $492,890.00 in an alleged PACA trust debt. 

Please check your A/R to see if these cases affect you.  If they do, please do not wait to assert your rights.

Judge Rejects Deal from Adams Produce, PNC Bank and Pro*Act

On May 21, 2012, Judge Mitchell of the U.S. Bankruptcy Court for the Northern District of Alabama rejected a proposed settlement in the Adams Produce Bankruptcy, which the Court identified as a case of “national interest.”

On May 22, 2012, The Packer published an article outlining Judge Mitchell’s reasons for rejecting the proposed settlement, which can be found here:

Judge Rejects Deal from Adams Produce, PNC Bank and Pro*Act

Echoing Jason Klinowski and Brian Jackiw of Freeborn & Peters’ objections to the proposed settlement, the Court cited the “lack of financial statements,” the lack of “schedules, statement of affairs and a full creditors’ matrix.”  As key reasons the Court would not approve the proposed settlement.  The Court went further to say that “we know very little about this company” and we are only “three weeks and three days into this case.”  Simply put, settlement was both premature and overreaching given the timing and all of the conditions contained in the proposal.

Judge Mitchell, agreeing with counsel from Freeborn & Peters, also took issue with the liability releases contained in the proposed settlement agreement.  Specifically, the Court noted that the “deal would have benefitted PNC Bank because it would get other creditors off the books, clearing the way for it to receive payment on a $5 million lien it claims to have against Adams Produce.”    Jason Klinowski and Brian Jackiw of Freeborn & Peters were not willing to allow their clients to sign away their future rights and the Court clearly agreed!

Jason Klinowski Quoted in The Packer’s Updated Article on Adams Produce

The Packer quoted Jason Klinowski in its 5/18/2012 updated article discussing the battle over a proposed settlement in the Adams Produce bankruptcy case, which involves the Debtor, PNC Bank and certain PACA creditors.

See:  Future Recovery Rights at Heart of PACA Case

Jason Klinowski and Brian Jackiw of Freeborn & Peters LLP are leading the opposition to the proposed settlement on behalf of several other PACA trust creditors.  Steve Leara and Jay Clark of Wallace, Jordan, Ratliff & Brandt LLC are an important part of the PACA creditors’ opposition to the proposed settlement and have filed their client’s opposition jointly with Klinowski and Jackiw.   Similarly, Jason Read of Rynn & Janowsky LLP and Howard Spector of Spector & Johnson PLLC have each filed pleadings in opposition to the proposed settlement.

Oral arguments in this highly publicized case will be held on Monday, May 21, 2012 at 10:30 a.m. in the U.S. Bankruptcy Court for the Northern District of Alabama, which is located in Birmingham, Alabama. 

FSMA Update: FDA Releases New Information Related to Food Facility Registration

The FDA recently published information answering two frequently asked questions:

QUESTION:  Does the Food Safety Modernization Act require a food facility to submit additional information to FDA in order for the facility to receive a food facility registration number?

ANSWER:  Yes!  Section 102 of FSMA amends section 415(a)(2) of the Federal Food, Drug, and Cosmetic Act by requiring food facilities to submit registrations to FDA containing additional information. Specifically, registrations are required to contain the e-mail address for the contact person of the facility, or for a foreign facility, the email address of the United States agent for the facility, and an assurance that FDA will be permitted to inspect the facility at the times and in the manner permitted by the FD&C Act. Additionally, if determined necessary by FDA, registrations are required to contain information regarding other applicable food categories, as determined appropriate by FDA, for foods manufactured/processed, packed, or held at registering facilities.

QUESTION: Will food facilities already registered with FDA under section 415 of the FD&C Act be required to renew their registrations during the October 1 – December 2012 registration renewal period? 

ANSWER:  Yes!  All facilities that are required to register must renew their registrations during the period beginning on October 1 and ending on December 31 of each even-numbered year. The first registration renewal cycle will be held from October 1 to December 31, 2012. Registrants are required to submit registrations to FDA containing the new information added by section 102 of FSMA. As new requirements and guidance go into effect related to facility registration renewal, FDA will post the information on this FSMA website.

As always, more information may be found at: Food Safety Modernization Act – FAQ Page

Jason Klinowski Quoted in The Packer’s Recent Article on Adams Produce

 

The Packer quoted Jason Klinowski in its 5/17/2012 article discussing the rapidly unfolding battle over a proposed settlement in the Adams Produce bankruptcy case.

See:  Adams Produce: Bankruptcy Deal Could Hamper PACA Creditors

Jason Klinowski and Brian Jackiw of Freeborn & Peters LLP are leading the opposition to the proposed settlement on behalf of several PACA trust creditors.

Jason Klinowski Cited in The Produce News’ Recent Article on Adams Produce

The Produce News quoted Jason Klinowski in its 5/17/2012 article discussing the rapidly unfolding battle over a proposed settlement in the Adams Produce bankruptcy case.

See:  Creditors Battling Over Potential Adams Produce Settlement

Jason Klinowski and Brian Jackiw of Freeborn & Peters LLP are leading the opposition to the proposed settlement on behalf of several PACA trust creditors.