10000002195

12-50073-a998 Doc#384 Filed 10/31/12 Entered 10/31/12 16:11:41 Main Document Pg 1 of 9
IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION IN RE: DELTA PRODUCE, L.P.,1 DEBTOR. CASE NO. 5:12-BK-50073-LMC (CHAPTER 11) JOINTLY ADMINISTERED
____________________________________________________________________________ SPECIAL PACA TRUST COUNSELS RESPONSE TO INTERNATIONAL BANK OF COMMERCE MOTION FOR RELIEF FROM AUTOMATIC STAY ____________________________________________________________________________ Special Perishable Agricultural Commodities Act (PACA) Trust Counsel files its response to the Motion for Relief from Automatic Stay [D.E. #357] filed by International Bank of Commerce (IBC) and shows the Court as follows: I. 1. FACTS
Superior Tomato and Avocado, Ltd., (Superior) is a debtor in possession of the
assets of Superior, and pursuant to the Perishable Agricultural Commodities Act, 7 U.S.C. 499e(c)(PACA) are statutory trustees of the PACA trust assets of Superior. Superior is a produce dealer licensed under PACA and subject to the requirements of PACA. Superior is controlled by Walter Scott Jensen (Jensen). Superior and Delta Produce, L.P. are jointly administered Debtors before this Court. 2. Staci Properties, Ltd. (Staci) is a debtor in possession, and is owner of the
following real property that Superior has occupied since prior to 2005: TRACT 1: 5,779 acres of land situated in the City of San Antonio, Bexar County, Texas, being Lot 4, Lot 5, Lot 6, Lot 7, Block 39, NCB3698, Edgewood Addition,
Debtors are the following entities: Delta Produce, L.P. Case No. 12-50073-LMC, Superior Tomato-Avocado, Ltd. Case No. 12-50074-LMC, Atled, Ltd. Case No. 12-50075-LMC and Staci Properties, Ltd. Case No. 12-50110LMC.
unrecorded Plat filed in Bexar County Tax Assessors Office Bexar County, Texas, and a portion of Lot 53, Block 39, NCB 3698, Las Villas De Merida as recorded in Volume 9555, Page 72, Deed and Plat Records of Bexar County, Texas; said 5.779 acre tract of land being more particularly described by metes and bounds as follows: BEGINNING, at a found inch iron rod on the southerly right of way line of Merida Street, for the northeasterly corner of said Lot 53, Block 39, same being the northwesterly corner of said Lot 4; THENCE, S 84 22 25 E, along the southerly right of way line of Merida Street, a distance of 706.56 feet to a found inch iron rod on the northwesterly right of way line of The Union Pacific Railroad; THENCE, Southwesterly, along the arc of a curve to the left having a radius of 2865.00 feet, a central angle of 14 22 30, an arc length of 718.80 feet and a chord bearing; S 43 18 41 W, 716.91 feet, to a found iron rod; THENCE, S 36 02 54 W, continuing along the northwesterly right of way line of The Union Pacific Railroad, a distance of 183.64 feet to a set inch iron rod on the northerly right of way line of Ceralvo Street for the southeasterly corner of said Lot 53; THENCE, N 84 10 44 W, along the northerly right of way line of Ceralvo Street, a distance of 35.88 feet to a set inch iron rod; THENCE, crossing said Lot 53, Block 39, the following courses: N 05 34 47 E, a distance of 90.14 feet to a set inch iron rod; N 83 48 09 E, a distance of 10.75 feet to a set inch iron rod; N 06 11 51 E, a distance of 21.99 feet to a set inch iron rod; N 83 48 09 E, a distance of 13.64 feet to a set inch iron rod; N 06 11 51 E, a distance of 230.44 feet to a set inch iron rod; N 83 48 09 E, a distance of 23.07 feet to a set inch iron rod; N 06 11 51 E, a distance of 18.94 feet to a set inch iron rod on the northerly line of said Lot 53, Block 39; THENCE, N 84 25 13 W, along the northerly line of said Lot 53, Block 39, a distance of 120.01 feet to a found inch iron rod for an interior angle corner of said Lot 53, Block 39, same being the southwesterly corner of said Lot 4; THENCE, N 06 14 30 E, along the easterly line of said Lot 53, Block 39, a distance of 363.95 feet to the POINT OF BEGINNING of herein described tract, and containing 5.779 acres of land, more or less. TRACT 2: 2.069 acres of land situated in the City of San Antonio, Bexar County, Texas, being the East 8.31 feet of Lots 57 through 65, Block 40, NCB 3699, all of Lot 17, Block 40, NCB 3699, Edgewood Addition, as recorded in volume 1625, Page 317, Deed and Plat Records of Bexar County, Texas, and all of Lot 18, Block 40, NCB 3699, H.A. Stauffer & H.G. Deviney Subdivision as recorded in Volume 3975, Page 223, Deed and Plat Records of Bexar County, Texas; said 2.069 acre tract of land being more particularly described as follows: BEGINNING, at a inch iron rod set on the northerly right of way line of Merida Street, said inch iron rod being N 84 22 25 W, 8.31 feet from the southeast corner of said Lot 65; THENCE, N 06 14 53 E, crossing said Lots 57 through 65, Block 40, along the westerly line of that certain tract of land conveyed to West Coast Produce Company, Inc. 2
as recorded in Volume 7133, Page 968, Official Public Records of Bexar County, Texas, a distance of 364.13 feet to a inch iron rod set; THENCE, S 84 21 53 E, along the northerly line of said Lot 57, at a distance of 8.31 feet passing the northeast corner of Lot 57, same being the northwest corner of Lot 17, at a distance of 127.92 feet passing the northeast corner of Lot 17, same being the northwest corner of said Lot 18, in all a total distance of 247.52 feet to a inch iron rod set for the northeast corner of said Lot 18, same being the northwest corner of Lot 19; THENCE, S 06 14 53 W, along the common boundary line between Lot 18 and Lot 19, a distance of 364.09 feet to a inch iron rod set on the northerly right of way line of Merida Street, for the southeast corner of said Lot 18, same being the southwest corner of Lot 19; THENCE, N 84 22 25 W, along the northerly right of way line of Merida Street, at a distance of 119.60 feet passing the southwest corner of Lot 18, same being the southeast corner of Lot 17, at a distance of 239.21 feet passing the southwest corner of Lot 17, same being the southeast corner of Lot 85, in all a total distance of 247.52 feet to the POINT OF BEGINNING of herein described tract, and containing 2.069 acres of land, more or less. (The Staci Warehouse.) 3. Stacis sole source of income, until late 2011, has been the rental payments it
received fromSuperior. Superior obtained the funds for the rental payments from the sale of produce. Staci is controlled by Jensen. 4. At all times since 2005, Superior has been continuously indebted to produce
suppliers who were beneficiaries of the PACA trust as provided under 7 U.S.C. 499e(c). The PACA trust held by Superior has continued to the present date as Superiors produce operations remain ongoing. 5. The first PACA trust claims against Debtors Delta Produce LP (Delta) and
Superior Tomato-Avocado, Ltd. (Superior) were filed in the District Court on December 27, 2011 (Muller Trading Company, Inc. v. Delta Produce, LP, et. al, 5:12-cv-00046-XR, Wilson Davis Company v. Superior Tomato-Avocado, Ltd. et. al, 5:12-cv-00047-XR, Rio Bravo Produce Ltd. Co., LLC v. Superior Tomato-Avocado Ltd., Inc. et. al, 5:12-cv-00048-XR (the Three District Court PACA Cases). The Three District Court Cases were assigned to Judge Rodriguez after the Debtors filed for Chapter 11.
6.
On January 23, 2012, Judge Rodriguez referred the Three District Court PACA
Cases to Judge Clark (See Orders on Case 5:12-cv-00048-XR D.E. #12; Case 5:12-cv-00047-XR D.E. #14; Case 5:12-cv-00046-XR D.E. # 28). 7. A claims procedure for identification of PACA claims and collection of PACA trust assets was intitiated in the Delta and Staci Debtor cases. A copy of the claims procedure order [Delta D.E. #52 and Superior D.E. #31] is attached hereto as Exhibit A and B, respectfively. That order authorizes Special PACA Counsel to collect PACA trust assets on behalf of PACA trust creditors. Pursuant to the claims procedure, Special PACA counsel has been collecting PACA trust assets. The claims procedure is concluding and Special PACA Counsel estimates that claims in Superior at approximately .51 on the dollar based on collections of accountes receivable. Special PACA Counsel is compensated solely from PACA trust funds of Delta and Superior. Special PACA Counsel is filing this objection pursuant to the authority granted in Judge Clarks January Claims Procedure Order. II. LAW 8. In 1984, the Congress enacted a major revision to PACA and created the PACA
trust, codified in 7 U.S.C. 499e(c). The PACA provides in pertinent part as follows: (c) Trust on commodities and sales proceeds for benefit of unpaid suppliers, sellers, or agents; preservation of trust; jurisdiction of courts. (1) It is hereby found that a burden on commerce in perishable agricultural commodities is caused by financing arrangements under which commission merchants, dealers, or brokers, who have not made payment for perishable agricultural commodities purchased, contracted to be purchased, or otherwise handled by them on behalf of another person, encumber or give lenders a security interest in, such commodities, or on inventories of food or other products derived from such commodities, and any receivables or proceeds from the sale of such commodities or products, and that such arrangements are contrary to the public interest. This subsection is intended to remedy such burden on commerce in perishable agricultural commodities and to protect the public interest.
(2) Perishable agricultural commodities received by a commission merchant, dealer, or broker in all transactions, and all inventories of food or other products derived from perishable agricultural commodities, and any receivables or proceeds from the sale of such commodities or products, shall be held by such commission merchant, dealer, or broker in trust for the benefit of all unpaid suppliers or sellers of such commodities or agents involved in the transaction, until full payment of the sums owing in connection with such transactions has been received by such unpaid suppliers, sellers, or agents. Payment shall not be considered to have been made if the supplier, seller, or agent receives a payment instrument which is dishonored. The provisions of this subsection shall not apply to transactions between a cooperative association, as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)), and its members. 9. In order to become a perfected PACA Trust Beneficiary, a PACA claimant
must meet three requirements. First, the claim in question must be for transactions involving perishable agricultural commodities. Perishable agricultural commodities (Produce) are defined under 7 U.S.C. 499a(b)(4) as fresh fruit and vegetables of every kind and character, whether or not frozen or packed in ice. Second, the Produce in question must have been received by a commission merchant, dealer or broker as defined by PACA.2 Third, the claimant must give the buyer timely written notice of its intent to preserve its rights under PACA.3 If the supplier, seller, or agent holds a PACA license, it may give notice of its intent by including specific statutory language on its billings or invoice statements.4 If it does not hold a PACA license, it must give a separate written notice. The Notice must be given within 30 days after expiration of (i) the regulatory payment term, or (ii) the parties written payment agreement.5 10. Superior is a merchant, dealer or broker as defined under the PACA. All of
Superiors assets are presumptively part of the PACA trust for the benefit of the PACA trust creditors of Superior. The PACA trust includes produce inventories, inventories of other
2 3 4 5
7 U.S.C. 499a(b)(5-7), e(c)(2); 7 C.F.R. 46.46(a)(1). 7 U.S.C. 499e(c)(3) and (4); 7 C.F.R. 46.46(f). 7 U.S.C. 499e(c)(4), 7 C.F.R. 46.46(f). 7 U.S.C. 499e(c)(3); 7 C.F.R. 46.46(f)(2).
products acquired from produce, accounts receivable from produce and the proceeds derived of such receivables. See, Movsowitz & Sons of Florida, Inc. v. Scotiabank, 447 F.Supp.2d 156, 162-63 (D.P.R. 2006). Claimants such as IBC must bear the burden of showing that any asset of Superior is not part of the res of the PACA trust of Superior. See, In re Kornblum, 81 F. 3rd 280, 286 (C.A. 2, NY 1996), deeming interest in a 9 year lease of units in the Hunts Point Market as PACA trust property because PACA trust assests were used purchase the units; Ger-Nis Intern., LLC v. FJB, Inc., 2008 WL 2600074 (S.D.N.Y., 2008), The Non-PACA Claimants bear the burden of proving that the Hunts Point propiertary leases are not PACA trust assests; Lone Star Milk Producers, Inc. v. Litzler, 370 B.R. 671-680 (Bankr. N.D.TX 2007); and SanzonePalmisano Co. v. M. Seaman Enterprises, Inc., 986 F.2d 1010, 1014 (6th Cir. 1993). The scope of the PACA trust includes all assets acquired by Superior from the inception of Superiors PACA trust. See, J.A. Besteman Co. v. Carters, Inc., 439 F.Supp.2d 774, 778 (W.D. Mich. 2006). As a produce dealer, Superiors assets derived directly or indirectly from produce sales or proceeds of those sales are subject to the PACA trust, and the trust includes non-produce assets acquired from produce sales. The PACA trust is not limited to merely produce inventory or cash or accounts receivable from produce sales. The PACA trust has even been extended to casualty insurance proceeds from insurance policies which were purchased with produce revenue. See Sam Wang Produce, Inc., v. EE Mart FC, LLC, 2010 WL 605082 p. 3 (E.D. Va. 2010) 11. As the Second Circuit noted in In re Kornblum & Co., 81 F.3d 280 (2nd Ct.
1996), creditors such as IBC bear the burden to show one of the following to take an asset out of the PACA trust: a. No PACA trust existed at the time the asset was acquired, or
b.
Even though a PACA trust existed at the time the asset was purchased, the
asset was not purchased with trust assets, or c. Even though a PACA trust existed at the time of purchase of the asset, the
PACA trust debtor subsequently paid off all produce creditors. Id.,81 F.3d at 281. III. 12. ARGUMENT
In paragraphs 2.27 and 2.28 of the subject motion , IBC correctly acknowledges
that the PACA trust and that such interests diminish or deteriorate IBCs security interest in such collateral. However, IBC incorrectly excludes the property the subject of this motion as collateral which is [not] directly affected by PACA Trust Claims. 13. The PACA Statue protects those, licensed by the United States Department of
Agriculture, who engage in the interstate and/or foreign trade of agricultural commodities. By establishing a PACA Trust, the proceeds of the sale of those commodities are protected for those who have sold such items, above even the secured claims of a mortgage holder. And as such IBC cannot foreclose on property that is a part of the PACA Trust res. 14. In this case, as Superior was at all times indebted to its PACA Trust creditors, the
proceeds used to pay for the rent on the Staci Properties were PACA Trust proceeds and the Staci Properties are therefore PACA Trust assets and the PACA Trust creditors have a superior right of claim to the proceeds from the liquidation of the sale of the property than the claim of the bank. Indeed, IBC was the bank for all the Debtors and was clearly on notice that Stacis sole source of income for years was rents paid by a PACA trust debtor, IBCs other customer, Superior. See Movsowitz & Sons of Florida, Inc. v. Scotiabank, Id at 164. 15. To this end, a disgorgement action has been filed by the Special PACA Trust
Counsel via an adversary in this case against IBC, to recover those payments held by IBC that
are PACA Trust Assets; as Superior was indebted to its PACA Trust suppliers at the time the payments were made to Staci and then to IBC. IBC had made a motion to dismiss this claim which is pending before the court. 16. The facts will show that the sole source of funds with which Staci purchased the property that is the subject of IBCs motion to lift the stay is a PACA trust assets held by Superior. IBC was the financial institution of all of the Debtors and was therefore on notice that the rental payments from Superior was the sole source of revenue for Staci until late 2011 and the sole means by which Staci made loan payments to IBC. The Staci Property, purchased with produce proceeds, much like the insurance proceeds in Sam Wang is presumptively a PACA trust asset of Superior. IBC bears the burden to prove otherwise. 17. Unless and until IBC can show one of the three Kornblum prongs, the proceeds of
sale of the assets should not be tendered to IBC, such as in foreclosure, but rather should remain with the Debtor subject to further orders of the Court. IBCs rights in any asset which is part of the PACA trust of Superior are subordinate to the rights of PACA trust creditors. Special PACA Counsel has conducted collections on behalf of PACA trust creditors pursuant to Judge Clarks Claims Procedure Order and has estimated that the shortfall of PACA trust assets to be between $800,000 and $1,000,000. Special PACA Counsel makes this limited objection to request that the Court require that $1,000,000 of proceeds from the foreclosure be set aside for potential shortfall of PACA trust assets of Superior. Special PACA Counsel notes that Judge King issued a similar order on Tuesday, October 30 to segregate proceeds of a sale of property owned by Atled, Inc. for the benefit of PACA trust creditors. The real estate owned by Atled, Inc. a subsidiary of Superiors sister company Delta, was the subject of a sale agreement approved Judge King who ordered a segegation and deposit of $400,000 in proceeds for PACA creditors.
Special PACA Counsel seeks the same protections for a portion of any foreclosure proceeds obtained by IBC from sale of the Staci Warehouse. WHEREFORE, Special PACA Trust Counsel prays that IBC be directed to set aside $1,000,000 of the proceeds of foreclosure of the Staci Warehouse for PACA trust creditors of Superior. DATED: October 31, 2012. Respectfully submitted, STOKES LAW OFFICE LLP 3330 Oakwell Court, Suite 225 San Antonio, TX 78218 Telephone (210) 804-0011 Facsimile (210) 822-2595 By: /s/ Craig A. Stokes______________ Craig A. Stokes SBN 19267700 cstokes@stokeslawoffice.com
Special PACA Counsel for Delta Produce, L.P.
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing instrument was forwarded via United States Mail, First Class, postage prepaid, to the parties listed on the attached service list marked as Exhibit C, on this the 31st day of October, 2012. /s/ Craig A. Stokes_____________________ Craig A. Stokes
12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 1 of 20

SO ORDERED. SIGNED this 25th day of January, 2012.
LEIF M. CLARK STATES BANKRUPTCY JUDGE
UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION
INRE: DELTA PRODUCE, L.P. Debtor.
CASE NO. 12-50073-lmc (Chapter 11)
ORDER ESTABLISHING A DEADLINE TO FILE PACA TRUST CLAIMS, FOR PROCEDURES TO RESOLVE THOSE CLAIMS, AND FOR APPOINTMENT OF SPECIAL PACA COUNSEL: DELTA PRODUCE, L.P.
TIDS ORDER ESTABLISHES A DEADLINE FOR PACA CLAIMS OF MARCH 2, 2012. TIDS ORDER ESTABLISHES OTHER DEADLINES. PLEASE REVIEW IT CAREFULLY. Came before the Court Debtor DELTA PRODUCE, L.P.'s ("DELTA") "Motion to Establish a Deadline to File P ACA Trust Claims, for Procedures to Resolve Those Claims, and for Appointment of Special PACA Counsel," and the Court having reviewed the Motion, and having considered the pleadings, testimony, evidence, and argument of counsel, fmds that the motion is well taken. It is therefore ORDERED:
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1
EXHIBIT A

1.
Notice of Claims Procedure Order. On or before February 11,2012, the
Court-appointed Special PACA Counsel for the Debtor, Craig A. Stokes ("Special PACA Counsel"), shall mail a copy of this Order by certified mail, return receipt requested, to all entities listed on DELTA'S Accounts payable schedule. In conjunction with this Order and other Orders before the Court, the Debtors and affiliated parties are ordered to establish a dedicated website where all required documents, all orders of this Court, and all pleadings filed by the Debtors or their affiliates shall be made available to any party in interest at no cost, Debtor's counsel, Langley & Barrack, Inc., shall establish this website, the court finds that this will enable parties without counsel and without access to "PACER" to review pleadings filed and Orders entered. The web address for this site is: www.omnimgt.com/DeltaProduceSuperiorTomatoAvocado.
2.
Deadline to File Claims and Claims Form. On or before March 2, 2012, any
creditor who claims to be owed money for supplying perishable agricultural commodities to DELTA, must file with the Bankruptcy Court a "PACA Proof of Claim" substantially similar to the form attached hereto as Exhibit "A" to the extent the claim is for supplying perishable agricultural commodities. The completed form should attach all supporting documents, such as invoices, purchase orders and confirmations, bills of lading, inspection certificates (if any), any agreements between DELTA and the PACA trust creditor claimant. These claims shall be filed at the following address: Clerk of the United States Bankruptcy Court 615 E. Houston Street, Rm. 597 San Antonio, TX 78205 Exhibit "A" is to be used instead ofthe "Proof of Claim" which is Official Form No. 10. Only
creditors who have claims based upon their supplying perishable agricultural commodities to
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DELTA should use Exhibit "A." All other claimants should file Form No. 10. To the extent that a claim made on a PACA Proof of Claim form is determined to not be PACA trust protected, or is P ACA trust protect but not satisfied by payment, the claim shall be deemed an ordinary claim, and no new proof of claim using the ordinary bankruptcy form (Form No. 10) need be used, and Debtor may object to the balance of the claim, if any, under ordinary bankruptcy procedures. 3.
Information Requests. Special P ACA Counsel is authorized to respond on
behalf of DELTA to all requests for documents reasonably requested by any party concerning any produce claim and to respond on behalf of Debtor to any claims. Special PACA Counsel's responses may be posted on the dedicated website located at www.omnimgt.com/DeltaProduceSuperiorTomatoAvocado. 4.
Claim against SUPERIOR. DELTA holds a PACA claim against SUPERIOR
in an amount of approximately $550,000.00. A. DELTA'S bankruptcy counsel, Langley & Banack, Inc., shall file any
applicable P ACA Trust claims on behalf of SUPERIOR against the Co-Debtor DELTA. This is found not to be a conflict based upon the description of the duties of Debtors and their counsel under PA CA. Each Debtor has a duty to assert P ACA claims against other parties for the benefit of a third party PACA Trust claimants (the automatic stay created by 11 U.S.C. 362(a) to the extent applicable, is released to permit filing, both Debtors having so stipulated). Further, special PACA Counsel shall be permitted to defend SUPERIOR's interests, and this shall not be a conflict. B. following fmdings: The Court has considered this matter on the record and makes the
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(1)
Discharge of these particular duties is not a conflict under 11
U.S.C. 327; in this context, the duties of counsel and Special PACA Counsel do not make either "notdisinterested;" these duties do not constitute representation of or the holding of an adverse interest, and (2) The Court fmds that this conduct is not a breach of the Texas Rules
of Disciplinary Procedure. 5
Any Produce Claims Not Timely Filed Shall be Forever Barred. The produce
claimant's filing deadline shall apply only to produce claims, and shall be in lieu of any claim deadline established in this case by the Bankruptcy Court or Bankruptcy Code, and any produce claims that are not timely filed will be forever barred. 6. Objection to Produce Claims. A. Special P ACA Counsel's Objections. On or before March 20, 2012,
Special PACA Counsel shall file any objections of DELTA to any produce claims to the extent that a claim appears to not be a qualified as a PACA trust obligation. Special PACA Counsel will serve copies of objections: (a) on the claimant by certified mail, return receipt requested, (b) on the Clerk of the Court using the CM!ECF system, and (c) on those persons who have filed a PACA Proof of Claim form and are not registered in the CMIECF system in the case.
B.
Produce Creditors' Objections. On or before March 31,2012, any party
in interest who has an objection to any produce claim must file an objection to the extent that a claim appears to not be a qualified as a PACA trust obligation and an objection has not already been made by Special PACA Counsel. The party shall serve the objection on: (a) on the claimant by certified mail, return receipt requested, (b) on the Clerk of the Court using the
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CMIECF system, and (c) on those persons who have filed a PACA Proof of Claim form and are not registered in the CMIECF system in the case. C. All objections must set forth in detail the legal basis (including citations to
relevant authority), and the factual basis for the objection to each invoice or claim documents subject to the objection and attach any documents on which the objection is based. A mere objection characterizing a claim as "disputed" or words to that effect will not serve as a valid objection. Failure to timely file an objection to a claim waives any objection the claim, and to the extent a claim is not timely objected to the claim shall be deemed a valid PACA trust claim. 7. Response to Objection. On or before April16, 2012, any PACA claimant
whose claim is subject to an objection may file a response to the objection. The PACA claimant shall file a copy of the response: (a) ifthe PACA claimant is registered in the CM/ECF system for this case, then by filing it in the CMIECF system, or (b) ifthe PACA claimant is not registered in the CMIECF system for this case, then by mailing it to the Clerk of the Court at the address provided in paragraph "3" above (the response must include the name of the case and the case number at the top of the first page). 8. Filing of Motion to Approve Compromise, or Alternatively to Set a Trial.
The produce claimant and the objecting party shall make a reasonable effort to resolve any objections to the produce creditors' claim that it is a qualified trust beneficiary pursuant to the PACA. A. Special PACA Counsel's Objections. By May 9, 2012, Special PACA
Counsel will file one of the following: (1) motion to approve compromise of the dispute which specifies the compromise, or (2) a motion to set trial which specifies the issue(s) in dispute. Special PACA Counsel will serve the above: (1) on the produce claimant by certified mail, return
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receipt requested, (b) on the Clerk of the Court using the CM/ECF system, and (c) on those persons who have filed a PACA Proof of Claim form and are not registered in the CM/ECF system for this case. All produce claimants who timely filed a P ACA Proof of Claim form have standing to object to the proposed compromise as if they had filed the same objection. B. Produce Creditor's Objection. By May 21,2012, a produce claimant who
timely filed an objection to another produce claimant's PACA Proof of Claim shall file one of the following: (1) a notice of compromise of the objection, or (2) a Motion to Set a Trial which specifies the issue(s) in dispute. The produce claimant will serve the above: (a) on the produce claimant who claim is being objected to by certified mail, return receipt requested, (b) on the Clerk of the Court using the CM/ECF system, and (c) on those persons who have filed a PACA Proof of Claim form and are not registered in the CMIECF system for this case. Produce claimants who intend to file a Motion to Set Trial must retain an attorney who is permitted to practice before this Court to file such a Motion, unless the produce claimant is an individual who is doing business as a sole proprietorship. 9. PACA Trust Chart. On or before June 5, 2012, the Special PACA Counsel will
file a P ACA Trust Chart in the form in the attached Exhibit "B" which provides for a proposed pro-rata distribution of the money that has been established to be trust funds under the Perishable Agricultural Commodities Act. The PACA chart will not include amounts for attorney's fees and costs, which claims will be determined by the Court pursuant to Paragraph 14 of this Order. Special PACA Counsel will serve the PACA Trust Chart: (a) on the Clerk ofthe Court using the CMIECF system, and (b) on those persons who have filed a PACA Proof of Claim form and are not registered in the CM/ECF system for this case.
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10.
Objection to Original P ACA Trust Chart. On or before June 22, 2012, any
party which objects to the proposed distribution on the P ACA Trust Chart must file any objections which shall specify the legal (including citations to relevant authority) and/or factual basis for the objection. A mere objection by characterizing a proposed distribution as "disputed" or words to that effect will not serve as a valid objection. The party will serve the objection: (a) on the Clerk ofthe Court using the CMIECF system, and (b) on those persons who have filed a PACA Proof of Claim form and are not registered in the CM/ECF system for this case. 11. Filing of a Notice of Resolution of Objection, or a Motion. The party objecting
to the PACA Trust Chart and the involved PACA Trust Claimant(s) shall make a reasonable effort to resolve any objections. On or before July 9, 2012, the party objecting to the PACA Trust Chart and the involved PACA Trust Claimant shall file one of the following: (a) a notice of a resolution of the dispute which specifies the resolution, or (b) ifthere has been no resolution, then the party objecting to the PACA Trust Chart must file with the Court a motion to determine the validity of the objection. The party objecting to the claim shall serve the foregoing: (a) on the Clerk ofthe Court using the CMIECF system, and (b) on those persons who have filed a PACA Proof of Claim form and are not registered in the CM/ECF system for this case. Such compromises will not require filing of a motion under Federal Rule of Bankruptcy Procedure 9019, which governs compromise and settlements all as provided at paragraph 13 below, unless the parties determine that compliance with the Rule is required or is in their best interests.
12.
Amended P ACA Trust Chart, and Distribution of P ACA Trust Funds. When
all objections to the original PACA Trust Chart have been resolved, the Special PACA Counsel will create an Amended PACA Trust Chart which incorporates the resolutions of objections to
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the original PACA Trust Chart. The Amended P ACA Trust Chart will not include amounts for attorney's fees and costs, which claims will be determined by the Court pursuant to Paragraph 14 ofthis Order. Special PACA Counsel shall serve the Amended PACA Trust Chart: (a) on the Clerk of the Court using the CMIECF system, and (b) on those persons who have filed a P ACA Proof of Claim form and are not registered in the CMIECF system for this case. 13. Interim Distribution(s). Promptly after Special PACA Counsel serves the
Amended P ACA Trust Chart, Special PACA Counsel will consult with at least four attorneys who represent a large amount ofPACA trust claims in the aggregate about the amount of a proposed interim distribution, which interim distribution will hold back a sufficient amount of money to cover future claims by the Special P ACA Counsel for his attorney's fees and costs, and by the trust beneficiaries for their attorney's fees and court costs, if any. Thereafter, Special P ACA Counsel will promptly file a Motion for a proposed interim distribution of the P ACA trust assets which will reflect a "hold back" of a sufficient amount of money to cover future claims for attorney's fees and costs as discussed above. Special PACA Counsel may file successive motions for interim distribution using the same procedure. Special PACA Counsel shall serve such motions: (a) on the Clerk of the Court using the CMIECF system, and (b) on those persons who have filed a PACA Proof of Claim form and are not registered in the CM!ECF system for this case.
14.
Appointment of Special PACA Counsel. A. As set forth above, the Court appoints Craig A. Stokes as Special PACA
Counsel for the Debtor. B. Special P ACA Counsel is authorized to take those steps reasonably
necessary to preserve and collect the PACA trust assets as defined at 7 U.S.C. 499e(c), and to
L & B 14013/0002/L0579074.DOC/2

facilitate the distribution ofthe collected PACA trust assets, including, without limitation: (a) attempting to determine the extent to which assets are PACA trust assets, including filing or defending adversary proceedings including declaratory judgment actions, (b) examining PACA trust claims filed by alleged P ACA trust beneficiaries, and objecting to those claims where appropriate, (c) collecting the Debtors' accounts receivables, including filing adversary actions, and (d) liquidating PACA trust assets other than the accounts receivables into cash. C. With respect to the collection of accounts receivables, Special P ACA
Counsel shall rely upon the collection efforts made by employees of DELTA to the extent that those efforts are continuing, and thereafter he may send a demand letter to account debtors, and
if he believes that filing an adversary proceeding is likely to be cost-effective, he may file

adversary proceedings against account debtors. D. Special P ACA Counsel is authorized to compromise a debt owed by an
account debtor without further authorization in the following circumstances: (a) the total debt owed by the account debtor is $10,000.00 or less, or (b) the reduction in the apparent amount owed is less than 25% of the total amount owed by that account debtor. The compromises do not require compliance with Rule 9019. E. Special P ACA Counsel is authorized to compromise a debt in other
circumstances if: (a) he has written consent to a compromise a claim against an account debtor from three attorneys who each represents a total of at least $100,000.00 in PACA trust claims, in which no compliance with Rule 9019 is required (see paragraph 10 above); or (b) a court order following a motion filed under Rule 9019.
L & B 14013/0002/L0579074.DOC/2

F.
Special PACA Counsel will respond to reasonable requests for status
updates made by PACA trust claimants as reasonable intervals at a level of detail that he deems appropriate. G. Special PACA Counsel's rate will be $350.00 an hour, and when he
believes that it would be cost-effective to do so, he will delegate tasks to his associate attorney Jessie Lopez, who may act on his behalf and who will bill at $200.00 per hour, or to his legal assistant who will bill at $100.00 per hour.
15.
Motions for Attorney's Fees and Costs.

A.
By PACA Trust Beneficiaries. After all claims have been resolved and all
PACA trust assets have been collected, Special PACA Counsel shall serve notice on each PACA trust beneficiary which states as follows: "Special PACA Trust Counsel intends to file a motion for approval of a final distribution of the PACA trust assets, and any PACA trust beneficiary who intends to file a motion for attorney's fees and costs must do so within thirty (30) days after service ofthis notice, or otherwise be barred from doing so." This notice will be posted only on the website. If a trust beneficiary does not timely file such a motion, then it is barred from seeking attorney's fees and costs from the remaining PACA trust assets. B. By Special PACA Counsel. Special PACA Counsel shall be "entitled" to
paid attorney's fees and costs from the PACA trust funds for the services rendered pursuant to this Order. The Court will determine the reasonable "amount" of such attorney's fees and costs. To be paid, Special PACA Counsel shall file a motion(s) for attorney's fees and costs should
L & B 14013/0002/L0579074.DOC/2
10

attach time sheets that have reasonably detailed time entries and which reflect time in increments of" .1" of an hour. Stokes may file interim motions for attorney's fees and costs.
16.
Final Distribution. After all claims have been resolved, all PACA trust assets
have been collected, and all claims for attorney's fees and costs have been resolved, Special PACA Counsel shall file a motion for a fmal distribution of the P ACA trust assets which shall include: (a) amounts awarded to the trust beneficiaries for attorney's fees and costs, if any, and (b) an amount awarded to Special P ACA Counsel for reasonable attorney's fees and costs incurred in his effort to comply with this Order.
17.
Access to Court Records on Website. DELTA's Counsel of record will establish
a dedicated website where all court-filed documents will be made available to all creditors at no costs at the following web address: www.omnimgt.com/DeltaProduce-SuperiorTomatoAvocado. The Court finds that tllis will enable parties without counsel and without access to "PACER" to review court-filed documents. The expense ofthe website will be paid from PACA trust funds. The Court finds and orders that, except as otherwise specified, use ofECF and the website constitutes adequate notice under thls Order.
18.
DELTA will promptly provide Special P ACA Counsel with what it believes to be
an accurate and current list of outstanding accounts payables owed to a creditor who has sold perishable agricultural commodities to DELTA (the "AlP List"), and the full name of each such creditor and their address. This list will be posted on the website. 19. Substitution of Trustee. If at any time the Debtor or PACA trust beneficiary
believes that Stokes is not complying with his obligations in this Order, the Debtor or a PACA trust beneficiary may file a motion to substitute trustee which seeks to remove Stokes as the Special P ACA Counsel and to substitute a new Special PACA Counsel.
L & B 14013/0002/L0579074.DOC/2
11

20.
Bankruptcy Procedures not Applicable. This Order shall supplement and
replace the nonnal and ordinary bankruptcy claims procedure where appropriate. 21. 22. Findings. Any order above shall also constitute a finding of fact, as appropriate. Exhibits. This Order incorporates all attached Exhibits.
###
Submitted by:
R. GLEN AYERS WILLIAM R. DAVIS, JR. ALLEN M. DeBARD LANGLEY & BANACK, INCORPORATED Suite 900, Trinity Plaza II 745 East Mulberry San Antonio, TX 78212-3166 Telephone: (21 0)-736-6600 Fax: (210) 735-6889
L & B 14013/0002/L0579074.DOC/2
12

UNITTEDSTATESBANKRUPTCYCOURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION
INRE:
SUPERIOR TOMATO-AVOCADO, LTD., Debtor.
CASE NO. 12-50074-LMC (Chapter 11)
PACA PROOF OF CLAIM FORM
I , - - - - - - - - - - - - - - - - - - - - - - - ' ' am the _ _
--------------------------fur_________
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ,which has active PACA license with the U.S.D.A.,
license n u m b e r - - - - - - - - - - - ("Claimant"). The following facts are
L & B 140 13/0002/L0579067.DOC/
Page 1 of4

within my personal knowledge, and if called upon to testify as a witness in court, I could and
would testify as follows.
1.
Documents. I am attaching true and correct copies of the original documents
that pertain to Claimant's claim against Superior Tomato-Avocado, Ltd ("Debtor") based upon Claimant's sale of perishable agricultural commodities to the Debtor at Exhibit "A." The documents include [check those that apply]: _ _ _ _ _ invoices; _ _ _ _ _ a statement showing each invoice and the total balance due; _ _ _ _ _ shipping documents, bills of lading, and passings; _ _ _ _ _ inspections (if any); _ _ _ _ _ trouble notices (if any); and _ _ _ _ _ and other documents.
2.
Payment Terms. The payment terms for each and every sales transaction
between Claimant and Debtor were as follows: [ ] Payment was due within _ _ _ _ _ _ _days after the day on which the
produce was accepted; or [ ] On ___day written payment terms from the date of [CIRCLE ONE:]
shipment- invoice- delivery- acceptance. True and accurate copies of written agreements, if any, providing for such payment terms are attached to this as Exhibit "B"; or
L & B 14013/0002/L0579067.DOC/
Page 2 of4

[ ]
Other. Please d e s c r i b e : - - - - - - - - - - - - - - - - - - - -
(attach additional pages if necessary).
3.
Objections to Deliveries. Debtor received and accepted delivery of the produce
identified on each and every invoice without objection, except as noted in the attached Exhibit "C." [Attach an Exhibit "C" if applicable].
4.
Preserving Trust Status. Claimant preserved its PACA trust interest against
Debtor in the following manner [CIRCLE "A" OR "B"]:

A.
by including statutorily required language on Claimant's invoice or other billing
statement [see 7 U.S.C. 499e(c)(4)]; or B. by serving Trust Notices upon the Debtor by [CIRCLE ONE] U.S. Mail-
Facsimile- or [specify other manner if applicable]: _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _on the following
date(s): - - - - - - - - - - - - - - - - - - - - - - - - - - = - True and

L & B 14013/0002/L0579067.DOC/
Page 3 of4

accurate copies of all Trust Notices and any related proof of delivery are attached hereto as
Exhibit "D." [Attach Exhibit "D" if applicable].
5.
Total Trust Amount Owed. The amount past due and unpaid by Debtor for
perishable agricultural commodities sold to the Debtor totals $_ _ _ _ _ _ _ _ _ _ __
___ plus interest according to the invoice at the amount of _ _ _ _ _ _ _% per annum
of _ _ _ _ _ _ _ for a total of$ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. (We
reserve the right to seek to recover attorney's fees).
I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE UNITED STATES THAT THE FOREGOING IS TRUE AND CORRECT.
Date: _ _ _ _ _ _ __, 2012 Sign Name
Print Name Address:
L & B 14013/0002/L0579067.DOC/
Page 4 of4
I\.)
I
.....
EXHIBIT "B"
CLAIMANT AMOUNT OF CLAIM AMOUNT TRUST QUALIFIED PERCENTAGE THE QUALIFIED CLAIMISOF ALL QUALIFIED CLAIMS TOTAL AMOUNT TOBE DISTRIBUTED TO ALL QUALIFIED CLAIMS PROPOSED TOTALS PRO RATA DISTRIBUTION
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L & B 14013/0002/L0579075.DOC/
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EXHIBIT "C"
PACA COLLECTIONS TOTAL TO DATE DISBURSEMENTS TO DATE TO ALLOWED TO PROFESSIONALS EXPENSES
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CLAIMS BY NAME RESOLVED CLAIMS NAME OF CLAIMS UNRESOLVED OR CONTESTED CLAIM AMOUNT
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L & B 14013/0002/L0579089.DOC/
SO ORDERED. SIGNED this 01st day of February, 2012.
INRE: SUPERIOR TOMATO-AVOCADO, LTD., Debtor.
CASE NO. 12-50074-LMC (Chapter 11)
ORDER ESTABLISHING A DEADLINE TO FILE PACA TRUST CLAIMS. FOR PROCEDURES TO RESOLVE THOSE CLAIMS, AND FOR APPOINTMENT OF SPECIAL PACA COUNSEL: SUPERIOR TOMATO-AVOCADO, LTD.
Came before the Court Debtor SUPERIOR TOMATO-AVOCADO, LTD'S ("SUPERIOR") "Motion to Establish a Deadline to File PACA Trust Claims, for Procedures to Resolve Those Claims, and for Appointment of Special PACA Counsel," and the Court having reviewed the Motion, and having considered the pleadings, testimony, evidence, and argument of counsel, :finds that the motion is well taken. It is therefore ORDERED:
1.
Notice of Claims Procedure Order. On or before January 29, 2012, the Court-
appointed Special PACA Counsel for the Debtor, Craig A. Stokes ("Special PACA Counsel"),
1
EXHIBITB

shall mail a copy of this Order by certified mail, return receipt requested, to all entities listed on SUPERIOR'S Accounts payable schedule. In conjunction with this Order and other Orders before the Court, the Debtors and affiliated parties are ordered to establish a dedicated website where all required documents, all orders of this Court, and all pleadings flied by the Debtors or their affiliates shall be made available to any party in interest at no cost, Debtor's counsel, Langley & Banack, Inc., shall establish this website, the court finds that this will enable parties without counsel and without access to "PACER" to review pleadings flied and Orders entered. The web address for this site is www.omnimgt.com/DeltaProduce-SuperiorTomatoAvocado. 2. Notice of Claims Procedure Order. On or before February 20, 2012, any
creditor who claims to be owed money for supplying perishable agricultural commodities to SUPERIOR, must flie with the Bankruptcy Court a "PACA Proof of Claim" substantially similar to the form attached hereto as Exhibit "A" to the extent the claim is for supplying perishable agricultural commodities. The completed form should attach all supporting documents, such as invoices, purchase orders and confirmations, bills of lading, inspection certificates (if any), any agreements between SUPERIOR and the P ACA trust creditor claimant. These claims shall be flied at the following address: Clerk of the United States Bankruptcy Court 615 E. Houston Street San Antonio, TX 78205 Exhibit "A" is to be used instead of the "Proof of Claim" which is Official Form No. 10. Only
creditors who have claims based upon their supplying perishable agricultural commodities to SUPERIOR should use Exhibit "A." All other claimants should file Form No. 10. To the extent that a claim made on a P ACA Proof of Claim form is determined to not be PACA trust protected, or is PACA trust protect but not satisfied by payment, the claim shall be deemed an ordinary
claim, and no new proof of claim using the ordinary bankruptcy form (Form No. 10) need be used, and Debtor may object to the balance of the claim, if any, under ordinary bankruptcy procedures. 3.
Information Requests. Special PACA Counsel is authorized to respond on
behalf of SUPERIOR to all requests for documents reasonably requested by any party concerning any produce claim and to respond on behalf of Debtor to any claims. Special PACA Counsel's responses may be posted on the dedicated website located at www.omnimgt.com/DeltaProduce-SuperiorTomatoAvocado. 4.
Claim by DELTA PRODUCE, L.P. against SUPERIOR. Special PACA
Counsel shall be permitted to defend SUPERIOR's interests with respect to a PACA Trust claim brought by DELTA PRODUCE, L.P. This claim may not be allowed or settled and compromised absent a motion and hearing, on notice, under Federal Rule of Bankruptcy Procedure 9019. 5
Any Produce Claims Not Timely Filed Shall be Forever Barred. The produce
claimanf s filing deadline shall apply only to produce claims, and shall be in lieu of any claim deadline established in this case by the Bankruptcy Court or Bankruptcy Code, and any produce claims that are not timely filed will be forever barred.
6.
Objection to Produce Claims.

A.
Special PACA Counsel's Objections. On or before March 15,2012,
Special PACA Counsel shall file any objections of SUPERIOR to any produce claims to the extent that a claim appears to not be a qualified as a P ACA trust obligation. Special PACA Counsel will serve copies of objections: (a) on the claimant by certified mail, return receipt requested, (b) on the Clerk of the Court using the CM!ECF system, and (c) on those persons who

have filed a PACA Proof of Claim form and are not registered in the CMIECF system in the case.
B.
Produce Creditors' Objections. On or before March 29, 2012, any party
in interest who has an objection to any produce claim must file an objection to the extent that a claim appears to not be a qualified as a P ACA trust obligation and has not already been made by Special PACA Counsel. The party shall serve the objection on: (a) on the claimant by certified mail, return receipt requested, (b) on the Clerk of the Court using the CMIECF system, and (c) on those persons who have filed a P ACA Proof of Claim form and are not registered in the CMIECF system in the case. C. All objections must set forth in detail the legal basis (including citations to
relevant authority), and the factual basis for the objection to each invoice or claim documents subject to the objection and attach any documents on which the objection is based. A mere objection characterizing a claim as "disputed" or words to that effect will not serve as a valid objection. Failure to timely file an objection to a claim waives any objection the claim, and to the extent a claim is not timely objected to the claim shall be deemed a valid PACA trust claim. 7.
Response to Objection. On or before April 16, 2012, any PACA claimant
whose claim is subject to an objection may file a response to the objection. The PACA claimant shall file a copy of the response: (a) if the PACA claimant is registered in the CMIECF system for this case, then by filing it in the CMIECF system, or (b) if the P ACA claimant is not registered in the CM/ECF system for this case, then by mailing it to the Clerk of the Court at the address provided in paragraph "3" above (the response must include the name of the case and the case number at the top of the first page).
8.
Filing of Motion to Approve Compromise, or Alternatively to Set a Trial.
The produce claimant and the objecting party shall make a reasonable effort to resolve any objections to the produce creditors' claim that it is a qualified trust beneficiary pursuant to the PACA. A. Special P ACA Counsel's Objections. By May 9, 2012, Special PACA
Counsel will file one of the following: (1) motion to approve compromise of the dispute which specifies the compromise, or (2) a motion to set trial which specifies the issue(s) in dispute. Special P ACA Counsel will serve the above: (I) on the produce claimant by certified mail, return receipt requested, (b) on the Clerk of the Court using the CMJECF system, and (c) on those persons who have filed a PACA Proof of Claim form and are not registered in the CMIECF system for this case. All produce claimants who timely filed a P ACA Proof of Claim form have standing to object to the proposed compromise as if they had filed the same objection.
B.
Produce Creditor's Objection. By May 21,2012, a produce claimant who
timely filed an objection to another produce claimant's PACA Proof of Claim shall file one of the following: (1) a notice of compromise of the objection, or (2) aMotion to Set a Trial which specifies the issue(s) in dispute. The produce claimant will serve the above: (a) on the produce claimant who claim is being objected to by certified mail, return receipt requested, (b) on the Clerk of the Court using the CMIECF system, and (c) on those persons who have filed a P ACA Proof of Claim form and are not registered in the CM/ECF system for this case. Produce claimants who intend to file a Motion to Set Trial must retain an attorney who is permitted to practice before this Court to file such a Motion, unless the produce claimant is an individual who is doing business as a sole proprietorship.
9.
P ACA Trust Chart. On or before June 5, 2012, the Special PACA Counsel will
file a PACA Trust Chart in the form in the attached Exhibit "B" which provides for a proposed pro-rata distribution of the money that has been established to be trust funds under the Perishable Agricultural Commodities Act. The PACA chart will not include amounts for attorney's fees and costs, which claims will be determined by the Court pursuant to Paragraph 14 of this Order. Special PACA Counsel will serve the PACA Trust Chart: (a) on the Clerk ofthe Court using the CMIECF system, and (b) on those persons who have filed a PACA Proof of Claim form and are not registered in the CMIECF system for this case. 10. Objection to Original PACA Trust Chart. On or before June 22, 2012, any
party which objects to the proposed distribution on the PACA Trust Chart must file any objections which shall specify the legal (including citations to relevant authority) and/or factual basis for the objection. A mere objection by characterizing a proposed distribution as "disputed" or words to that effect will not serve as a valid objection. The party will serve the objection: (a) on the Clerk of the Court using the CMIECF system, and (b) on those persons who have filed a P ACA Proof of Claim form and are not registered in the CM!ECF system for this case. 11. Filing of a Notice of Resolution of Objection, or a Motion. The party objecting
to the PACA Trust Chart and the involved PACA Trust Claimant(s) shall make a reasonable effort to resolve any objections. On or before July 9, 2012, the party objecting to the PACA Trust Chart and the involved PACA Trust Claimant shall file one of the following: (a) a notice of a resolution of the dispute which specifies the resolution, or (b) if there has been no resolution, then the party objecting to the PACA Trust Chart must file with the Court a motion to determine the validity of the objection. The party objecting to the claim shall serve the foregoing: (a) on
the Clerk of the Court using the CM/ECF system, and (b) on those persons who have filed a PACA Proof of Claim form and are not registered in the CMIECF system for this case. Such compromises will not require filing of a motion under Federal Rule of Bankruptcy Procedure 9019, which governs compromise and settlements all as provided at paragraph 13 below, unless the parties determine that compliance with the Rule is required or is in their best interests.
12.
Amended P ACA Trust Chart, and Distribution of P ACA Trust Funds. When
all objections to the original PACA Trust Chart have been resolved, the Special PACA Counsel will create an Amended P ACA Trust Chart which incorporates the resolutions of objections to the original P ACA Trust Chart. The Amended PACA Trust Chart will not include amounts for attorney's fees and costs, which claims will be determined by the Court pursuant to Paragraph 14 of this Order. Special PACA Counsel shall serve the Amended PACA Trust Chart: (a) on the Clerk of the Court using the CMJECF system, and (b) on those persons who have filed a P ACA Proof of Claim form and are not registered in the CMIECF system for this case.
13.
Interim Distribution(s}. Promptly after Special PACA Counsel serves the
Amended PACA Trust Chart, Special P ACA Counsel will consult with at least four attorneys who represent a large amount ofPACA trust claims in the aggregate about the amount of a proposed interim distribution, which interim distribution will hold back a sufficient amount of money to cover future claims by the Special PACA Counsel for his attorney's fees and costs, and by the trust beneficiaries for their attorney's fees and court costs, if any. Thereafter, Special P ACA Counsel will promptly file a Motion for a proposed interim distribution of the P ACA trust assets which will reflect a "hold back" of a sufficient amount of money to cover future claims for attorney's fees and costs as discussed above. Special PACA Counsel may file successive
motions for interim distribution using the same procedure. Special P ACA Counsel shall serve such motions: (a) on the Clerk of the Court using the CM!ECF system, and (b) on those persons who have filed a P ACA Proof of Claim form and are not registered in the CM!ECF system for this case.
14.
Appointment of Special P ACA Counsel.

A. As set forth above, the Court appoints Craig A. Stokes as Special PACA
Counsel for the Debtor.
B.
Special P ACA Counsel is authorized to take those steps reasonably
necessary to preserve and collect the P ACA trust assets as defined at 7 U .S.C. 499e(c), and to facilitate the distribution ofthe collected PACA trust assets, including, without limitation: (a) attempting to determine the extent to which assets are P ACA trust assets, including filing or defending adversary proceedings including declaratory judgment actions, (b) examining PACA trust claims filed by alleged PACA trust beneficiaries, and objecting to those claims where appropriate, (c) collecting the Debtors' accounts receivables, including filing adversary actions, and (d) liquidating P ACA trust assets other than the accounts receivables into cash. C. With respect to the collection of accounts receivables, Special P ACA
Counsel shall rely upon the collection efforts made by employees of SUPERIOR to the extent that those efforts are continuing, and thereafter he may send a demand letter to account debtors, and if he believes that filing an adversary proceeding is likely to be cost-effective, he may file adversary proceedings against account debtors. D. Special PACA Counsel is authorized to compromise a debt owed by an
account debtor without further authorization in the following circumstances: (a) the total debt owed by the account debtor is $10,000.00 or less, or (b) the reduction in the apparent amount
owed is less than 25% of the total amount owed by that account debtor. The compromises do not require compliance with Rule 9019. E. Special P ACA Counsel is authorized to compromise a debt in other
circumstances if: (a) he has written consent to a compromise a claim against an account debtor from three attorneys who each represents a total of at least $100,000.00 in PACA trust claims, in which no compliance with Rule 9019 is required (see paragraph 10 above); or (b) a court order following a motion filed under Rule 9019. F. Special PACA Counsel will respond to reasonable requests for status
updates made by P ACA trust claimants as reasonable intervals at a level of detail that he deems appropriate. G. Special PACA Counsel's rate will be $350.00 an hour, and when he
believes that it would be cost-effective to do so, he will delegate tasks to his associate attorney Jessie Lopez, who may act on his behalf and who will bill at $200.00 per hour, or to his legal assistant who will bill at $100.00 per hour.
15.
Motions for Attorney's Fees and Costs.

A. By P ACA Trust Beneficiaries. After all claims have been resolved and all
PACA trust assets have been collected, Special PACA Counsel shall serve notice on each PACA
trust beneficiary which states as follows:
"Special P ACA Trust Counsel intends to file a motion for approval of a :final distribution of the PACA trust assets, and any PACA trust beneficiary who intends to file a motion for attorney's fees and costs must do so within thirty (30) days after service of this notice, or otherwise be barred from doing so."

This notice will be posted only on the website. If a trust beneficiary does not timely file such a motion, then it is barred from seeking attorney's fees and costs from the remaining PACA trust assets. B.
By Special P ACA Counsel. Special PACA Counsel shall be "entitled" to
paid attorney's fees and costs from the PACA trust funds for the services rendered pursuant to this Order. The Court will determine the reasonable "amount" of such attorney's fees and costs. To be paid, Special P ACA Counsel shall file a motion(s) for attorney's fees and costs should attach time sheets that have reasonably detailed time entries and which reflect time in increments of" .1" of an hour. Stokes may file interim motions for attorney's fees and costs.
16.
Final Distribution. After all claims have been resolved, all P ACA trust assets
have been collected, and all claims for attorney's fees and costs have been resolved, Special P ACA Counsel shall file a motion for a fmal distribution of the P ACA trust assets which shall include: (a) amounts awarded to the trust beneficiaries for attorney's fees and costs, if any, and (b) an amount awarded to Special P ACA Counsel for reasonable attorney's fees and costs incurred in his effort to comply with this Order.
17.
Access to Court Records on Website. SUPERIOR's Counsel of record will
establish a dedicated website where all court-filed documents will be made available to all creditors at no costs at the following web address: www.omnimgt.com/DeltaProduceSuperiorTomatoAvocado. The Court fmds that this will enable parties without counsel and without access to "PACER" to review court-filed documents. The expense of the website will be paid :from P ACA trust funds. The Court finds and orders that, except as otherwise specified, use ofECF and the website constitutes adequate notice under this Order.
10

12-50074-a998 Doc#31 Filed 02/01/12 Entered 02/01/1210:30:37 Main Document Pg 11 of 17
18.
SUPERIOR will promptly provide Special PACA Counsel with what it believes to
be an accurate and current list of outstanding accounts payables owed to a creditor who has sold perishable agricultural commodities to SUPERIOR (the "AlP List"), and the full name of each such creditor and their address. This list will be posted on the website. 19. Substitution of Trustee. If at any time the Debtor or P ACA trust beneficiary
believes that Stokes is not complying with his obligations in this Order, the Debtor or a PACA trust beneficiary may file a motion to substitute trustee which seeks to remove Stokes as the Special P ACA Counsel and to substitute a new Special PACA Counsel. 20. Bankruptcy Procedures not Applicable. This Order shall supplement and
replace the normal and ordinary bankruptcy claims procedure where appropriate. 21. Findings. Any order above shall also constitute a fmding of fact, as appropriate.
###
Submitted by:
RGLENAYERS WILLIAM R. DAVIS, JR. ALLEN M. DeBARD LANGLEY & BANACK, INCORPORATED Suite 900, Trinity Plaza II 745 East Mulberry SanAntonio, TX 78212-3166 Telephone: (21 0)-736-6600 Fax: (210) 735-6889
11

EXHIBIT "A''

INRE: SUPERIOR TOMATO-AVOCADO, LTD., Debtor.
CASE NO. 12"50074"LMC (Chapter 11)
PACA PROOF OF CLAIM FORM
------------------------------------------~
~~
-----------------------------------------fur________________
------------------------ which has active PACA license with the U.S.D.A.,
license number----------------- ("Claimant"). The following facts are
Page 1 of4

within my personal knowledge, and if called upon to testify as a witness in court, I could and
would testify as follows.
1.
Documents. I am attaching true and correct copies of the original documents
that pertain to Claimant's claim against Superior Tomato-Avocado, Ltd ("Debtor") based upon Claimant's sale of perishable agricultural commodities to the Debtor at Exhibit "A." The documents include [check those that apply]: _ _ _ _ _ invoices; _ _ _ _ _ a statement showing each invoice and the total balance due; _ _ _ _ _ shipping documents, bills of lading, and passings; _ _ _ _ _ inspections (if any); _ _ _ _ _ trouble notices (if any); and
- - - - - and other documents.

2. Payment Terms. The payment terms for each and every sales transaction
between Claimant and Debtor were as follows: [ ] Payment was due within _ _ _ _ _ _ _d.ays after the day on which the
produce was accepted; or [ ] On _ _day written payment terms from the date of [CIRCLE ONE:]
shipment- invoice- delivery- acceptance. True and accurate copies of written agreements, if any, providing for such payment terms are attached to this as Exhibit "B"; or
Page2 of4

[ ]
Other. Please d e s c r i b e : - - - - - - - - - - - - - - - - - - -
(attach additional pages if necessary).
3.
Objections to Deliveries. Debtor received and accepted delivery of the produce
identified on each and every invoice without objection, except as noted in the attached Exhibit "C." [Attach an Exhibit "C" if applicable].
4.
Preserving Trust Status. Claimant preserved its PACA trust interest against
Debtor in the following manner [CIRCLE "A" OR "B"]: A. by including statutorily required language on Claimant's invoice or other billing
statement [see 7 U.S.C. 499e(c)(4)]; or B. by serving Trust Notices upon the Debtor by [CIRCLE ONE] U.S. Mail-
Facsimile- or [specify other manner if applicable]:._ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ on the following
date(s): - - - - - - - - - - - - - - - - - - - - - - - - . ! - True and Page3 of4

accurate copies of all Trust Notices and any related proof of delivery are attached hereto as
Exhibit "D." [Attach Exhibit "D" if applicable].

5. Total Trust Amount Owed. The amount past due and unpaid by Debtor for
perishable agricultural commodities sold to the Debtor totals$_ _ _ _ _ _ _ _ _ __ _ _ plus interest according to the invoice at the amount of _ _ _ _ _ _ % per annum of _ _ _ _ _ _ for a total of$ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . (We
reserve the right to seek to recover attomeis fees). I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE UNITED STATES THAT THE FOREGOING IS TRUE AND CORRECT.
Date: _ _ _ _ _ _ _ _ , 2012 Sign Name
Print Name Address:
Page 4 of4

EXHIBIT "B"
CLAIMANT AMOUNT OF CLAIM AMOUNT TRUST QUALIFIED PERCENTAGE THE QUALIFIED CLAIMISOF ALL QUALIFIED CLAIMS TOTAL AMOUNT TOBE DISTRIBUTED TO ALL QUALIFIED CLAIMS PROPOSED
PRO RATA
DISTRIBUTION
12-50073-a998 Doc#384-3 Filed 10/31/12 Entered 10/31/12 16:11:41 Service List Pg 1 of 2

William R. Davis Langley & Banack, Inc. 745 E. Mulberry, Suite 900 San Antonio, TX 78212-3141 United States Trustee - SA12 US trustees Office 615 E. Houston, Suite 533 P.O. Box 1539 San Antonio, Texas 78295-1539 A&A Transportation, Inc. 4741 College Park San Antonio, TX 78249
A&A Concepts, LLC 1219 s. Zarzamora Street San Antonio, TX 78207
Alamo Leasing 2010 NW Military Highway San Antonio, TX 78213
Averitt Brokerage Co., Inc. Mr. David Faubion 9999 Perrin Beitel, Suite B San Antonio, TX 78217
B. Catalani, Inc. 1500 South Zarzamora, Unit #326 San Antonio, TX 78207
Daimler Trust c/o Stephen G. Wilcox PO Box 11509 Fort Worth, TX 76110-0509 Divine Ripe, LLC c/o Michael J. Black BURNS & BLACK, PLLC 750 Rittiman Road San Antonio, Texas 78209 Harvest Crown Co., Inc. P. O. Box 13578 Bakersfield, CA 93389-3578
Del Campo Supreme, Inc. 672 W. Frontage Rd. Nogales, AZ 85621-9633
Dimare California P. O. Box 517 Newman, CA 95360-0517
Franks Distributing of Produce P. O. Box 2020 Nogales, AZ 85628-2020
Harllee Packing, Inc. P.O. Box 8 Palmetto, FL 34220-0008
IFCO Systems NA 5250 Tacco Drive San Antonio, TX 78244-1007
Internal Revenue Service P.O. Box 7346 Philadelphia, PA 19101-7346
Irigoyen Farms, Inc. 14801 S. Clovis Ave. Selma, CA 93662-9641
JFJ Company 127 N. San Gabriel San Antonio, TX 78237-1531
W. Scott Jensen c/o Randall A. Pulman Pulman, Cappuccio, Pullen & Benson, LLP 2161 NW Military Highway, Suite 400 San Antonio, Texas 78213 Key Equipment Finance 600 travis St., 14th Floor Houston, TX 77002-3009
Le Best Banana Supply Co., Inc. P. O. Box 295 Hidalgo, Texas 78557-0295
Muller Trading Company, Inc. c/o Jason R. Klinowski, Esq. FREEBORN & PETERS LLP 311 S. Wacker Dr., Suite 3000 Chicago, IL 60606 Market Dispatch Services, Inc. c/o Celinda Baez Guerra Flume Law Firm, LLP 1020 NE Loop 410, Suite 200 San Antonio, TX 78209
Kingdon Fresh Produce, Inc. 2243 North Goolie Rd., #A Donna, TX 78537-5688
M & P Produce, Inc. 1500 Zarzamora #308 San Antonio, TX 78207-7284
Main Street Bank 23970 U. S. 59 North Kingwood, TX 77339-1535
Malena Produce 947 E. Frontage Rd. Rio Rico, AZ 85648-6264
Maxim Egg Farms P. O. Box 200805 Dallas, TX 75320-0805
Mecca Family Farms, Ltd. P. O. Box 541779 Lake Worth, FL 33454-1779
Muller Trading Company, Inc. Bruce W. Akerly CANTEY HANGER LLP 1999 Bryan Street, Suite 3300 Dallas, Texas 75201
12-50073-a998 Doc#384-3 Filed 10/31/12 Entered 10/31/12 16:11:41 Service List Pg 2 of 2

Steven E. Nurenberg MEUERS LAW FIRM, PL 5395 Park Central Court Naples, FL 34109 Paccar Financial Corp. PO Box 676014 Dallas, TX 75267-6014 Rio Bravo Produce 1006 S. Cesar Chavez Edinburg, TX 78542-4211
Rio Queen Citrus, Inc. c/o Michael J. Black BURNS & BLACK, PLLC 750 Rittiman Road San Antonio, Texas 78209 Willson Davis Co. c/o Joe R. Hinojosa Barkhurst & Hinojosa, P.C. 110 Broadway, Suite 350 San Antonio, Texas 78205
Slankard Produce 1500 So. Zarzamora St. San Antonio, TX 78207-7284
Sunriver Sales c/o Michael J. Black BURNS & BLACK, PLLC 750 Rittiman Road San Antonio, Texas 78209 Visalia Produce Sales Mr. George M. Matoian PO Box 190 Kingsburg, CA 93631
Vaughan Foods, Inc. Ms. Sonya Logan 216 NE 12th Street Moore, OK 73160
###
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12-50073-a998 Doc#384 Filed 10/31/12 Entered 10/31/12 16:11:41 Main Document Pg 1 of 9

Superior Tomato and Avocado, Ltd., (Superior) is a debtor in possession of the

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Special PACA Counsel for Delta Produce, L.P.

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SO ORDERED. SIGNED this 25th day of January, 2012.

LEIF M. CLARK STATES BANKRUPTCY JUDGE

INRE: DELTA PRODUCE, L.P. Debtor.

CASE NO. 12-50073-lmc (Chapter 11)

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Notice of Claims Procedure Order. On or before February 11,2012, the

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Information Requests. Special P ACA Counsel is authorized to respond on

Claim against SUPERIOR. DELTA holds a PACA claim against SUPERIOR

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 4 of 20

Discharge of these particular duties is not a conflict under 11

Produce Creditors' Objections. On or before March 31,2012, any party

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 5 of 20

12-50073-a998 Doc#52 Filed 01/25/12 Entered 01/25/12 13:03:25 Main Document Pg 6 of 20

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 6 of 20

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 7 of 20

12-50073-a998 Doc#52 Filed 01/25/12 Entered 01/25/12 13:03:25 Main Document Pg 8 of 20

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 8 of 20

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 9 of 20

if he believes that filing an adversary proceeding is likely to be cost-effective, he may file

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Special PACA Counsel will respond to reasonable requests for status

Motions for Attorney's Fees and Costs.

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 11 of 20

Access to Court Records on Website. DELTA's Counsel of record will establish

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Bankruptcy Procedures not Applicable. This Order shall supplement and

12-50073-a998 Doc#52 Filed 01/25/12 Entered 01/25/12 13:03:25 Main Document Pg 13 of 20

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 13 of 20

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 14 of 20

UNITTEDSTATESBANKRUPTCYCOURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

SUPERIOR TOMATO-AVOCADO, LTD., Debtor.

CASE NO. 12-50074-LMC (Chapter 11)

PACA PROOF OF CLAIM FORM

I , - - - - - - - - - - - - - - - - - - - - - - - ' ' am the _ _

license n u m b e r - - - - - - - - - - - ("Claimant"). The following facts are

L & B 140 13/0002/L0579067.DOC/

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 15 of 20

would testify as follows.

Documents. I am attaching true and correct copies of the original documents

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(attach additional pages if necessary).

Objections to Deliveries. Debtor received and accepted delivery of the produce

Debtor in the following manner [CIRCLE "A" OR "B"]:

by including statutorily required language on Claimant's invoice or other billing

Facsimile- or [specify other manner if applicable]: _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _on the following

date(s): - - - - - - - - - - - - - - - - - - - - - - - - - - = - True and

12-50073-a998 Doc#384-1 Filed 10/31/12 Entered 10/31/12 16:11:41 Exhibit Pg 17 of 20

Exhibit "D." [Attach Exhibit "D" if applicable].

perishable agricultural commodities sold to the Debtor totals $_ _ _ _ _ _ _ _ _ _ __

of _ _ _ _ _ _ _ for a total of$ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. (We