Annual Case Law Update of Agribusiness
June Monroe is Vice Chair of the Agribusiness Committee and a partner at Rynn & Janowsky, LLP, where she practices agricultural law, PACA trust law, and employment law. She provides services to agribusinesses from formation to operating challenges, and employment practices and defense, as well as produce transactional contracts and litigation with the USDA and in civil courts.
In re Spiech Farms, LLC, 840 F. App’x 861 (6th Cir. 2021) (Factoring company is not a PACA trust creditor).
The Sixth Circuit Court of Appeals agreed with the U.S. Bankruptcy Court for the Western District of Michigan and the U.S. District Court for the Western District of Michigan that factoring company Produce Pay, Inc. ("Produce Pay") did not have a valid claim brought under the Perishable Agricultural Commodities Act ("PACA" or the "Act"), 7 U.S.C. §§ 499e, against debtor Spiech Farms, LLC ("Spiech"). Produce Pay set out to use the Act as a way to secure complete recourse against Spiech’s assets, but the court found that Produce Pay neither qualified as a seller or supplier of commodities nor purchased Spiech’s accounts receivable, and consequently held that Produce Pay was ineligible for priority creditor relief through its alleged PACA claim.