Posted August 1, 2014
Allens Inc. has been ordered to pay $2 million under the Perishable Agricultural Commodities Act (PACA), according to The Packer article available here. A recent blog post on the Allens case is available on the blog here.
D&E Farms Inc. is one of 52 PACA creditors seeking payment from the canned food company. Allens declared bankruptcy in October 2013. Allens Inc. filed objections to 50 of the PACA claims totaling $18.3 million in January.
Gregory Brown, an attorney for D&E, estimated the final amount of $2.25 million that Allens Inc. will be ordered to pay, which will include attorney fees.
“I think it’s important to note that the court rejected the debtors’ argument that ancillary expenses described in a pre-transaction agreement for the sale of produce are not covered by PACA,” said Brown.
Brown speculated that more than half of the $18.3 million will have to be paid by Allens based on Judge Brown’s order.
“Approximately $11 million of the total PACA claims were objected to by debtors based on this discredited legal argument,” Brown said. “We expect that all the decisions on the relevant claims will be decided the same way.”
For more information on the Perishable Agricultural Commodities Act (PACA), please visit the National Agricultural Law Center’s website here.
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