Kingdom Fresh Produce, Inc., et al v. Delta Produc

The Perishable Agricultural Commodities Act (PACA), 7 U.S.C. 499e, is a Depression-era statute designed to protect sellers of perishable produce form delinquent purchasers. In this case, two such purchasers filed for bankruptcy and the bankruptcy court appointed special counsel to collect and disburse funds to PACA-protected sellers that had claims against the purchasers-turned-debtors. At issue on appeal is whether special counsel’s (Stokes) fees and expenses be disbursed from the PACA fund. Nowhere in the orders on the interim appeals is there an indication that the district court realized these were interlocutory orders and believed there was a benefit to hearing them in this piecemeal manner. That absence means the district court did not have appellate jurisdiction over the first two interim fee orders. Therefore the court vacated for lack of jurisdiction the district court’s order vacating the first and second fee awards. The court found that Kingdom Fresh has no standing to dispute the percentage of Stokes’s fee allocable to the nonobjecting parties. Only the small percentage of Stokes’s fee apportionable to Kingdom Fresh is at issue in this appeal; Stokes is free to keep the remainder. The court agreed with the Second Circuit that PACA’s unequivocal language requires that a PACA trustee - or in this case, its functional equivalent - may not be paid from trust assets “until full payment of the sums owing” is paid to all claimants. Accordingly, the court affirmed the district court's order vacating the final fee award, but only as to Kingdom Fresh's pro rata share of the fees. View "Kingdom Fresh Produce, Inc., et al v. Delta Produc" on Justia Law