United States District Court, E.D. North Carolina, Western Division
C. Dever III United States District Judge.
13, 2019, John C. Bircher III, Administrative Counsel
("Administrative Counsel"), moved for Interim
Distribution of Available Funds [D.E. 148] ("Interim
Distribution Motion"). On June 27, 2019, plaintiffs
L&M Companies, Inc. ("L & M") and Palumbo
Foods, LLC ("Palumbo") responded in opposition
[D.E. ISO] and intervenor Select Funding, LLC ("Select
Funding") responded in opposition [D.E. 151]. On July
11, 2019, intervenors JH Honeycutt & Sons, Inc.,
Lipman-Texas, LLC, Nature's Way Farms, Inc., Nickey
Gregory Company, LLC, and The Thomas Colace Company, Inc.
replied in support of the interim distribution [D.E. 152,
153], As explained below, the court grants Administrative
Counsel's Interim Distribution Motion.
Counsel submitted the Interim Distribution Motion pursuant to
the consent order. See [D.E. 63, 122]. Pursuant to the
consent order, Administrative Counsel took steps to secure
and preserve assets and to marshal funds of defendant Unique
Foods Company, Inc. ("Unique"). Administrative
Counsel did so for the benefit of parties claiming
entitlement to trust funds arising under the Perishable
Agricultural Commodities Act ("PACA") and who
submitted proof of those claims according to the procedures
provided in the consent order (i.e., the "PACA
his appointment, Administrative Counsel has marshaled funds
from the sale of real estate that Unique owned and from
collecting accounts receivable. See Mot. [D.E. 148] ¶ 3.
Administrative Counsel is accumulating additional funds by
selling certain equipment that Unique owned, and continuing
to collect Unique's accounts receivable. See Id.
As of June 11, 2019, Administrative Counsel had marshaled
$987, 905.67. See Id. ¶ 4.
Counsel has determined that $225, 000.00 (the "Available
Funds") is available for an immediate distribution to
PACA Claimants according to the procedures outlined in the
consent order. See Id. ¶ 5. Administrative
Counsel has determined that the remainder of the funds, in
the amount of approximately $760, 565.29, should be withheld
and preserved pending resolution of certain disputes
including those (i) regarding disposition of funds from the
sale of Unique's real property, which represent the
amount of $719, 889.34, and (ii) regarding objections to
amounts claimed by the PACA Claimants. See Id.
Additionally, as payment for attorneys' fees,
Administrative Counsel has received one payment of $6, 314.45
and is due a second payment of $2, 249.38. See Id.
¶ 6. Administrative Counsel has reflected these amounts
as deductions, in the amount of withheld funds. See id.
Counsel prepared a chart summarizing the following
information with respect to the PACA Claimants (the
"PACA Trust Chart"):
a. Asserted PACA Claimants, with principal amounts claimed,
accrued interest claimed, fees claimed, total amount claimed,
pro rata percentage (per PACA Claimant) of the total dollar
amount of all PACA claims, and amount of each claim subject
b. Invalid claim amount;
c. Settled amount;
d. Valid claim amount for first (i.e., "interim")
e. Pro rata share of first distribution of Available Funds;
f . Amount of share withheld;
g. Distribution for undisputed ...