Monthly Archives: January 2014

PACA Trust Litigation Alert

PACA Trust Litigation Alert

PACA Trust Litigation Alert

On January 10, 2014, a civil action was filed in California against Sunfresh USA, Inc. to collect approximately $389,000 in alleged PACA trust debt.

On January 10, 2014, a civil action was filed in North Carolina against Nichols Foodservice, Inc. to collect approximately $204,000 in alleged PACA trust debt.

On January 14, 2014, a civil action was filed in Maryland against Five Days Market, Inc. t/a G Mart International to collect approximately $114,000 in alleged PACA trust debt.

On January 16, 2014, a civil action was filed in Illinois against T&T Food Service, Inc. a/t/a T&T Foodservice, Inc. to collect approximately $90,000 in alleged PACA trust debt.

On January 16, 2014, a civil action was filed in New Jersey against Rockaway Green Farmers Market LLC to collect approximately $38,000 in alleged PACA trust debt.

On January 16, 2014, a civil action was filed in New York against Global Tropical Fresh Fruit Corp. to collect approximately $349,000 in 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.

Jason Klinowski to Serve as Special PACA Counsel to Allens Canning During its Chapter 11 Bankruptcy Case

Allens Canning

On October 28, 2013, Allens, Inc. d/b/a Allens Canning (the “Debtor”) filed for Chapter 11 bankruptcy protection.  Anticipating over $20 million in potential PACA claims, the Debtor retained Jason Klinowski of Freeborn & Peters LLP’s food industry team to serve as special PACA counsel.  In this capacity, Jason assisted the Debtor in the preparation of the PACA claims procedure order and now manages the Debtor’s obligations under the order.  To be clear, the PACA claims procedure order is a Court approved procedure by which the Debtor and all potential PACA trust beneciaries test the validity of the PACA claims.

In the Courtroom, Jason also helps the Debtors address such complex PACA trust issues as:

  • Whether the Court Should Compel the Debtor to Create and Fund a Segregated PACA Trust Account  (NO)
  • Whether the Debtor May Use PACA Trust Assets in Connection With its Efforts to Reorganize Under Chapter 11 of the Bankruptcy Code (YES)
  • The Proper Use of Pre-Transaction Written Agreements to Limit PACA Trust Liability (to be determined)
  • And more…

The Debtor’s Chapter 11 case not only involves significant amounts of potential PACA trust liability, but it also contains several complex PACA trust issues, the resolution of which could change how the produce industry does business.