If you own a business that deals in fruits and produce, you enjoy significant protections as a creditor under the Perishable Agricultural Commodities Act (PACA). If you sell your perishable goods to a business that goes bankrupt, you have a right under PACA to collect payment ahead of all other creditors.
At the Orantes Law Firm in Los Angeles, our lawyers understand both the rights of creditors and the responsibilities of debtors in California. If you are owed money by a supermarket, restaurant or other business that has filed bankruptcy, we offer a free initial consultation to give you honest answers about your collection options so you can recover as much as possible.
What Is PACA?
PACA is a little understood law that creates a special trust to protect the rights of businesses that grow, gather, sell or distribute fruits and produce. The trust applies to farmers, food brokers, wholesalers, farmer’s cooperatives and other businesses that deal in perishable goods.
Prior to PACA, fruit and produce sellers had to stand in line behind secured creditors when a customer filed bankruptcy. Often, this meant that produce and fruit sellers received little or nothing from the debtor, while secured creditors such as banks received full payment. PACA creates a trust that moves fruits and produce sellers to the front of the line.
With PACA, debtors are required to pay 100 percent of what they owe, and creditors can obtain payment soon after the bankruptcy case is filed. Because the rules of collecting debts in bankruptcy are complex, it’s important to consult an experienced creditors’ rights lawyer as soon as possible to protect your rights under PACA.
Contact Our Los Angeles Creditors’ Rights Attorneys
For more information about collecting debts from a business that files bankruptcy, call (213) 340-0534 or contact us by e-mail to schedule a free initial consultation. Se habla español.