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.