Bankruptcy Discharge Trumps PACA, But Does It Really?

In a case of first impression, the 11th Circuit Court of Appeals ruled in Spring Valley Produce, Inc. et al. vs. Forrest, ____ F.3d____(11th Cir. Case Number 21-12133) on August 31, 2022, that the right to a discharge in bankruptcy trumps the longstanding language of the Perishable Agricultural Commodities Act ("PACA")(7 U.S.C. '499a-499t) which purports to bar bankruptcy relief under theories of fiduciary duties owed to certain sellers of agricultural products. PACA was first enacted by Congress in 1934 and then revised in 1984 to create a fiduciary duty due from buyers of perishable farm products to growers such that a trust obligation is owed to growers in the proceeds of goods sold by the intermediate purchaser which is generally a wholesaler or food broker. In a lengthy opinion, the Court examined the tension between the imposition of a statutory PACA...