Farmer Favoritism: Statutory Protections For Creditors in Agricultural Bankruptcy Cases
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Discusses federal and state statutes and related case law that potentially alter the typical dynamics between creditors and debtors in agricultural industry bankruptcy cases. Part One discusses bankruptcy law in general, including the identities of the principal parties in a bankruptcy case, the different chapters of bankruptcy, and the various types of claims and their priorities under the Bankruptcy Code. Parts Two through Four describe and analyze trust fund statutes, PACA, the Packers and Stockyards Act (PSA), and state agricultural statutes that purport to provide similar trust fund protections to claims arising from PACA and the PSA. Parts Two through Four will also discuss how, in certain circumstances, those statutes allow claimants to upend the claim hierarchy and get paid first, and how courts have dealt with conflicts between the policy goals of protecting certain classes of creditors, and the policy goals of the Bankruptcy Code. Part Five specifically addresses how secured lenders may attempt to preserve a first lien on farm products purchased in the ordinary course of business, and how failure to do so may eliminate their claims against the purchaser of the underlying collateral.