Last month a federal appeals court ruled in favor of Central Market of Florida, Inc., holding that bankrupt Florida grocery store owners could discharge debts. This decision comes after Spring Valley Produce, Inc., sued Central Market for produce they never paid for. According to the 11th Circuit, the Perishable Agricultural Commodities Act (PACA) does not require a produce buyer to keep trust assets segregated from its other assets or prevent the buyer from using the trust assets for other purposes.
Allowing PACA debtors to be freed from personal liability for their debts through bankruptcy discharge promotes the overarching goal of the Bankruptcy Code of providing debtors with a fresh start,” the 11th Circuit wrote. “At the same time, PACA still provides significant benefits to unpaid produce sellers.
Source: Produce delivery debts not exempted from bankruptcy discharge – 11th Circuit | Reuters