INJUNCTION ESTABLISHING PACA TRUST CLAIMS PROCEDURE
WHEREAS, on July 10, 2008, Plaintiffs Progreso Produce Ltd 1 LP and Pacific West Marketing, Inc. ("Plaintiffs") commenced the instant action against Defendants Triton Imports d/b/a Triton International ("Triton" or "Defendant") and its principals, Maria Hall and Alex Hall ("Principals"), to enforce the trust provisions of Section 5 of the Perishable Agricultural Commodities Act, 7 U.S.C. §499e(c) ("PACA").
WHEREAS, Plaintiffs also named Banco Popular North America ("Bank") as a defendant to the action, as the Bank may be in possession of PACA trust funds that belong to beneficiaries of PACA trust funds.
WHEREAS, on September 26, 2008, and October 14, 2008, respectively, Intervenor Plaintiffs Del Monte Fresh Produce N.A., Inc. and Unified, Ltd. d/b/a Pan American Banana (collectively, "Intervenor Plaintiffs") filed their Complaints in Intervention against Triton and the Principals.
WHEREAS, the trust provisions of PACA establish a statutory, nonsegregated trust under which Defendant Triton is required to hold all trust assets including inventory, proceeds, and accounts receivable in trust for qualified beneficiaries until full payment is made. [7 U.S.C. §499(e)(c)2].
WHEREAS, Triton, despite receiving proper service of process, and despite having knowledge of this action, has not retained counsel and has been defaulted.
WHEREAS, counsel for Plaintiffs, Intervening Plaintiffs and the Bank (the "Parties") have conferred and reached an agreement regarding the terms of this Injunction and PACA Claims Procedure (the "Order"), and have filed a Stipulation to entry of the Order, which provides that counsel for each party consents to the terms and conditions of the Order;
WHERAS, the Parties agree that it is in their best interests to establish an orderly liquidation of Triton's remaining assets, collect outstanding accounts receivable, identify and establish the nature of these assets, satisfy certain claims which are subject to PACA, and determine to whom the assets must be distributed.
WHEREAS, the Parties have filed a Stipulation, wherein they stipulate as follows:
1. Plaintiffs, Intervening Plaintiffs and other similarly situated unpaid suppliers of produce may be entitled to a beneficial interest in the single pool of Triton's PACA trust assets that include, without limitation, inventory of perishable agricultural commodities, inventory of food or products derived from produce, accounts receivable or proceeds from the sale of such commodities or products, cash, and other assets, produce related or not, commingled with proceeds of such commodities or products ("PACA Trust Assets"). Plaintiffs and Intervening Plaintiffs reserve the right to assert that Triton's other assets, including without limitation, furniture, fixtures, equipment, vehicles, leases and leasehold improvements (the "FF&E") should be considered or deemed to be included within the definition of PACA Trust Assets. Plaintiffs and Intervening Plaintiffs also reserve the right to pursue deficiency claims, if any, against the Principals and other potential transferees of PACA Trust Assets.
2. The Bank reserves all rights regarding the amount, validity and PACA trust status of the claims of Plaintiffs and Intervening Plaintiffs or any other similarly situated PACA trust beneficiary who joins this action, as well as all legal and equitable defenses available with respect to claims asserted in this case. The Bank further reserves the right to challenge whether any assets of Triton are PACA Trust Assets, whether the other assets of Triton are subject to the claimed PACA trust, and also reserves the right to establish and enforce its security interests in Triton's assets as having priority to any claimed PACA liens.
3. The Parties agree that the Order is reasonable and necessary to provide a procedural framework for the orderly liquidation of Triton's PACA Trust Assets and to review, qualify and satisfy any and all claims against the Assets, to maximize the recovery for all unpaid beneficiaries of the PACA trust, and to ensure the rights of all potential claimants are efficiently addressed in a single proceeding without the expense of administering multiple separate actions to enforce Triton's obligations to all potential PACA trust beneficiaries.
Based on the foregoing, IT IS HEREBY ORDERED, as follows:
1. Pursuant to Fed. R. Civ. P. 65, this Order is binding upon the Parties, their officers, agents, employees, banks, or attorneys and all other persons or entities who receive actual notice of the entry of this Order. In this regard, the Bank is hereby directed to serve a copy of this Order on all financial institutions and/or account receivable debtors of Triton with which Triton does any business, or who may be holding any assets for or on behalf of Triton.
Triton, its agents, employees, officers, directors, and representatives are restrained and enjoined from hypothecating, transferring or dissipating any Assets or withdrawing funds from the PACA Trust Account, as defined below, except as set forth in this Order.
2. Due to the agreement reached between the Parties, and in recognition of the fact Triton is currently in possession of the PACA Trust Assets at issue, and considering the remedial nature of PACA, the Court hereby finds good cause to set the bond in this matter at $0.00.
II. ESTABLISHMENT OF PACA TRUST ACCOUNT
3. Triton and/or its Principals shall provide a detailed listing of all outstanding accounts receivable (the "Receivables"), accounts payable and all other assets held in Triton's name and in their possession to the signatories of this Order within three (3) business days of the date of this Order. Because Triton has not appeared in this matter, and because the books and records of Triton are in disarray, Bank has voluntarily served subpoenas on all currently known account receivable debtors of Triton seeking production of invoices issued by Triton to said debtors, as well as evidence of payments made to Triton or any other person or entity on said invoices. Bank will, once responses to the subpoenas are received, prepare an accounting of the responses and attempt to establish what funds are still owed, what funds were paid over and to whom, and what funds were for payment of PACA products as opposed to non-PACA products or services rendered by Triton. This accounting shall be filed with the Court and served on the Parties.
4. The Bank is hereby directed to, within three (3) business days of the date of this Order, open an interest bearing account under the name of "Triton PACA Trust Account," (the "PACA Trust Account"). Signatories shall be counsel for Intervening Plaintiff Del Monte Fresh Produce N.A., Inc. and counsel for the Bank, each of whom shall receive copies of the monthly statements. The Bank shall file the monthly bank statements with the Court upon receipt.
5. No distributions or withdrawals may be made from the PACA Trust Account, except as authorized in this Order or by further order of this Court. The PACA Trust Account is not subject to execution by any other creditor of Triton.
6. Immediately upon opening the PACA Trust Account, Triton and/or its Principals shall transfer any and all sums held in Triton's name and in their possession, or otherwise derived from the Assets, into the PACA Trust Account and shall continue depositing all Assets recovered into this account. Bank will serve an Order from this Court directing all account receivable debtors who are currently holding funds owed to Triton to submit said funds, together with copies of the invoices which are being paid, to counsel for Bank. Counsel for Bank shall cause said funds to be deposited into the PACA Trust Account and provide copies of all deposits made to all Parties herein. Upon request by one or more of the Parties, Counsel for Bank shall provide an account statement showing all funds received to date and the current balance of the PACA Trust Account.
7. Any and all interest which accrues on the funds in the PACA Trust Account from the date the account was opened to the date of distribution, shall follow the funds into the hands
of the creditor ultimately deemed entitled to such funds.
III. LIQUIDATION OF THE ASSETS
8. The Bank shall promptly and aggressively liquidate any and all Receivables or other debts owed to Triton, through any reasonable means, and shall deposit all proceeds into the PACA Trust Account. Any proposed settlement and collection of a disputed Receivable may be discounted up to 15% without further notice. Any higher discount must be noticed via facsimile or email to the signatories to this Order who shall be given three (3) business days to object. Absent any objection, the settlement can be consummated as proposed.
9. Triton and/or its Principals and/or the Parties may liquidate any and all of Triton's FF&E, if any, through any reasonable means, and deposit the gross proceeds of any such sale of assets into the PACA Trust Account. Any proposed sale of assets involving a sale price of $10,000.00 or more shall be noticed via facsimile or email to the signatories of this Order who shall be given three (3) days to object. Absent any objection, the deal can be consummated as proposed. An auction of Triton's assets is contemplated. Notice of such shall be given via facsimile or email to the signatories of this Order.
10. Triton and/or its Principals and/or the Parties shall maintain the integrity and security of Triton's financial records including accounts payable and receivable. Upon written request, during normal business hours, Triton shall produce or allow inspection of such records in their possession that are reasonably necessary to enforce this Order including without limitation, books and records, invoices, credit memos, accounts receivable ledgers, insurance policies, inventory lists, accounts payable lists, customer lists, and invoices from vendors.
IV. PACA CLAIMS PROCEDURE
11. Triton and/or its Principals shall, within three (3) business days from the date of this order, provide counsel for Del Monte and the Bank with detailed listings of all outstanding accounts payable and receivable in their possession, which shall specifically include the full name, address and account balance.
12. Counsel for Del Monte shall then, within ten (10) business days from the date of this Order, issue a written notice ("the Notice"), in a form similar to that attached hereto as Exhibit A, to each and every entity, or to their counsel of record, on Triton's listing of accounts payable. Such written Notice shall be sent via certified mail with return receipt requested, or any equally verifiable means to prove delivery upon the recipient. All persons or entities claiming to be PACA trust beneficiaries of Triton are hereby granted leave to intervene, without further notice or motion and once having intervened and filed a Proof of Claim, each such entity shall be bound by all Orders entered in this case. Any Complaints in Intervention in which Bank is a named defendant shall be deemed answered based upon the answer to such complaints already filed by Bank in this action.
13. The following schedule of deadlines shall apply:
Complaint in Intervention/Proof of Claim ...