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PACA Trust Litigation Alert!

PACA Trust Litigation Alert

PACA Trust Litigation Alert

On September 6, 2013, a civil action was filed in California against J.D. Produce, Inc. in an effort to collect approximately $54,000.00 in alleged PACA trust debt.

On September 9, 2013, a civil action was filed in New York against New A & N Food Market, Inc. in an effort to collect approximately $36,000.00 in alleged PACA trust debt.

On September 13, 2013, a civil action was filed in Colorado against Mi Pueblo Latin Market, Inc. t/a Mi Pueblo Market in an effort to collect approximately $202,000.00 in alleged PACA trust debt.

On September 19, 2013, a civil action was filed in New Jersey against Dandrea Produce, Inc. in an effort to collect approximately $600,000.00 in alleged PACA trust debt.

On September 19, 2013, a civil action was filed in Ohio against Arena Produce Co., Inc. in an effort to collect approximately $54,000.00 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.

Another Successful Conference in the Books… Thank You for Joining Us!

Midwest Produce Conference LogoMichael Jordan's Steakhouse LogoI wanted to take a second and thank everyone who joined me and Freeborn’s Food Industry Team at Michael Jordan’s Steakhouse for a cocktail reception after the Midwest Produce Conference & Expo.  Those of you who attended know that Freeborn’s event provides a great way for folks to close out the conference and experience one of Chicago’s “must visit” restaurants.  Our event also helps you maximize your networking time in Chicago by providing a great atmosphere to connect with your produce industry peers and colleagues.  For those of you who could not make it, we hope to see you in New Orleans for the upcoming PMA show.

Jason Klinowski and Freeborn’s Bankruptcy & Financial Restructuring Group Tapped to Represent the Official Committee of Unsecured Creditors in the Pro’s Ranch Markets Chapter 11 Case

Pros Ranch MarketThe Official Committee of Unsecured Creditors in the Pro’s Ranch Markets’ bankruptcy case recently retained Freeborn’s Bankruptcy and Financial Restructuring Group to help maximize their recovery in this Chapter 11 case.  Specifically, Freeborn possesses considerable experience representing official committees of unsecured creditors in chapter 11 cases involving retail grocers, food service companies, and food distribution companies.  Because the attorneys in Freeborn’s Food Industry Team routinely represent these same types of food industry clients, we are highly familiar with the issues affecting both debtors and creditors in this space.  This allows Freeborn to be incredibly effective when it comes to maximizing value for creditors.

PACA Trust Litigation Alert

PACA Trust Litigation Alert

PACA Trust Litigation Alert

On May 31, 2013, a civil action was filed in New York against Robert Guiliano d/b/a Guiliano Brother’s Produce in an effort to collect about $287,100.00 in alleged PACA trust debt.

On June 3, 2013, a civil action was filed in California against Miki’s Farm Fresh Market, Inc. in an effort to collect about $16,200.00 in alleged PACA trust debt.

On June 4, 2013, a civil action was filed in Illinois against FP Drive LLC d/b/a LA International in an effort to collect about $11,100.00 in alleged PACA trust debt.

On June 10, 2013, a civil action was filed in Florida against Alexa Produce, Inc. in an effort to collect about $24,000.00 in alleged PACA trust debt.

On June 11, 2013, a civil action was filed in Massachusetts against Banana Joe’s Farm Stand and Deli, Inc. in an effort to collect about $8,700.00 in alleged PACA trust debt.

On June 14, 2013, a civil action was filed in California against Edgar P. Barajas d/b/a Premier Fresh in an effort to collect about $215,900.00 in alleged PACA trust debt.

On June 19, 2013, a civil action was filed in New York against Southern Hospitality Xanadu LLC d/b/a Southern Hospitality in an effort to collect about $10,700.00 in alleged PACA trust debt.

On June 19, 2013, a civil action was filed in Texas against Farmer’s Fruit and Vegetable Company in an effort to collect about $29,600.00 in alleged PACA trust debt.

On June 20, 2013, a civil action was filed in New York against Lansky’s Operating Corporation d/b/a Lansky’s in an effort to collect about $41,900.00 in alleged PACA trust debt.

On June 22, 2013, a civil action was filed in Florida against Star International Food, LLC in an effort to collect about $7,200.00 in alleged PACA trust debt.

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

Belle Foods Files for Chapter 11 Bankruptcy Protection

Belle Foods LogoOn July 1, 2013, Belle Foods LLC filed for Chapter 11 bankruptcy protection in the Northern District of Alabama.

Although Belle Foods presented a top 20 list of unsecured creditors, the business has not yet submitted its full schedules of debts and assets, statement of financial affairs or other required information. The business estimates it owes between $10 million and $50 million in debt and that it holds the same general range in assets.

Belle Foods told the bankruptcy court that its Chapter 11 bankruptcy petition was precipitated by a variety of factors that have led to a deterioration in its business and a lack of liquidity. The debtor cited technical issues with its accounting system during 2012 that led to losses and said it also “experienced issues with its lending structure and relationship.” Additionally, higher payroll taxes in 2013 led to a decline in purchases by the debtor’s customer base, according to documents filed with the court. Furthermore, Belle Foods said it has seen an increased amount of competition in several of its markets from other grocers. With older locations, the debtor explained it has had difficulty competing with the newer grocery stores that have moved into its markets.

Belle Foods is a privately held company that owns and operates a grocery store chain that operates stores under the banners of Belle Foods, Piggly Wiggly and Food World. Combined, Belle Foods LLC states it operates 57 stores in Florida, Georgia, Alabama and Mississippi.

It is not clear from the pleadings how much, if any, PACA debt exists.  I will provide more updates as new information becomes available.

Jason Klinowski Quoted in The Packer’s Recent Article on Pro’s Ranch Markets Bankruptcy

the-packerOn Mary 30, 2013, Tom Karst of The Packer published an article discussing the Pro’s Ranch Markets bankruptcy case and the $7.2 million dollars in anticipated PACA trust claims.  Here is a link to Tom Karst’s article: Retailer Bankruptcy Could Involve Millions in PACA Claims.  In case you did not know, “Pro’s Ranch Markets is a Hispanic-oriented grocery chain with stores in seven stores in Phoenix, one store in Las Cruces, N.M., one store in Albuquerque, N.M., and two stores in El Paso, Texas. The grocery chain employs 2,235 employees in four states, according to court documents.”  Tom’s article quoted Jason as follows:

Jason Klinowski, agricultural and food law attorney from the firm of Freeborn & Peters LLP, Chicago, said the grocery chain apparently has a limited pool of assets from which to pay its creditors.

“If the debtor’s voluntary petition accurately reflects the amount of assets in the debtor’s estate, then I think that PACA creditors will be well-advised to quickly object to the debtor’s use of the cash collateral and start looking for alternative sources of recovery.”

Pro’s Ranch Markets – Bankruptcy UPDATE

Pros Ranch MarketAs reported by SeaFax on May 30, 2013 – Pro’s Ranch Markets has not presented full lists of assets and liabilities or statements of financial affairs, but estimates that liabilities are between $10 million to $50 million. Those documents are due by June 11, unless an extension is requested and granted.

Pro’s Ranch Markets did file a motion to establish procedures and to allow claims of Perishable Agricultural Commodities Act (PACA) claimants and Packers and Stockyards Act (PASA) claimants. The motion states the debtors reviewed their records and identified at least 83 potential PACA claimants, owed about $7.2 million in pre-petition claims potentially subject to PACA.

In addition to the PACA claimants, the debtors have certain vendors who may assert claims pursuant to PASA as a result of providing them with beef, swine and poultry products. The debtors do not think they are subject to PASA.

The motion requests that the bankruptcy court enter an order establishing procedures, allowing claims and authorizing the debtors to pay, in their sole discretion, the pre-petition claims of PACA claimants and PASA claimants.  The obvious danger here is that PACA requires each unpaid supplier to share in the distribution of the PACA trust and an order authorizing the debtor to pay claims on a first come first serve basis could prejudice some PACA creditors.

PRM Family Holding Company LLC is the sole member of the other limited liability company debtors. Prodigio Mercado LLC operates three grocery stores located in Phoenix, AZ. Provenzano’s LLC operates four grocery stores located in Phoenix. Pro’s ABQ Ranch Markets LLC operates two grocery stores located in New Mexico, one in Albuquerque and one in Las Cruces. Pro’s ELP Ranch Markets LLC operates two stores located in El Paso, TX. Pro’s ELP Ranch Markets Beverage Company LLC holds the liquor license for Pro’s ELP Ranch Markets LLC. Pro & Son’s LLC holds title to intellectual property owned by the debtors. Pro’s Ranch Markets (CA) LLC acts as the paymaster, manager, internal wholesaler, oversees trucking and distribution, pays all accounts payable and provides employees to all of the debtors’ stores. Collectively the debtors own and operate 11 retail grocery stores and employ approximately 2,235 full time workers in the stores and other locations.

Pro’s Ranch Markets Bankruptcy

Pros Ranch MarketOn May 28, 2013, Pro’s Ranch Markets filed for Chapter 11 bankruptcy protection in the District of Arizona.  Although the company has yet to file its schedules, the Debtor anticipates $7,229,772.85 in pre-petition PACA claims from 83 companies.

To be clear, the Pro’s Ranch Markets bankruptcy involves each of the following entities:

  • PRM Family Holding Company LLC
  • Prodigio Mercado LLC
  • Pro’s ABQ Ranch Markets LLC
  • Pro’s ELP Ranch Markets LLC
  • Pro’s ELP Ranch Markets Beverage Company LLC
  • Pro & Son’s LLC
  • Pro’s Ranch Markets (CA) LLC
  • Provenzano’s LLC

Please check your A/R to see if this case affects you.  If it does, please do not wait to assert your rights.

PACA Trust Litigation Alert!

PACA Trust Litigation Alert

PACA Trust Litigation Alert

On May 13, 2013, a civil action was filed in Connecticut against Rosa Brothers, Inc. d/b/a Guilford Food Center to recover about $34,000.00 in alleged PACA trust debt.

On May 14, 2013, a civil action was filed in Florida against River Sun Fresh LLC, River Sun Produce LLC, and Riverland and Indian Sun LC to recover about $32,500.00 in alleged PACA trust debt.

On May 16, 2013, a civil action was filed in Florida against Causeway Food Group, Inc. d/b/a Food Giant Supermarket to recover about $9,000.00 in alleged PACA trust debt.

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

 

Freeborn to Exhibit at United Fresh!

RBCS medium rectangle ad with tom

Please stop by Booth # 840 and visit Jason Klinowski of Freeborn & Peters.  Members of our Food Industry Team will be on hand to greet everyone.  Come see us!