In Re San Joaquin Food Service, Inc., Debtor. Bowlin & Son, Inc. v. San Joaquin Food Service, Inc.

Bowlin & Son, Inc., (“Bowlin”) appeals the decision of the bankruptcy appellate panel (“BAP”) affirming the bankruptcy court’s decision denying Bowlin’s motion for relief from automatic stay. Bowlin seeks to recover $238,000 from the debtor, San Joaquin Food Service, Inc., (“San Joaquin”) on the ground that this sum is held apart from the bankruptcy estate in a trust created by the federal Perishable Agricultural Commodities Act, 1930, as amended, (“PACA”) for the benefit of produce sellers such as Bowlin. The BAP concluded that Bowlin was not entitled to this sum because Bowlin failed to comply with PACA provisions when it did not include the terms of payment on its invoices to San Joaquin. We affirm.

I

Bowlin is a supplier of fresh produce. In the course of business, Bowlin delivered to San Joaquin produce for which San Joaquin owes Bowlin $238,000. Bowlin argues that San Joaquin holds this sum for Bowlin’s benefit in a trust created under PACA, 7 U.S.C. §§ 499a-499t. The money, Bowlin contends, is therefore separable from San Joaquin’s bankruptcy estate. Bowlin seeks relief from the automatic stay imposed when San Joaquin declared bankruptcy in order to recover from this…