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12-50073-lmc Doc#335 Filed 10/05/12 Entered 10/05/12 08:28:21 Main Document Pg 1 of 3

UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION IN RE: DELTA PRODUCE, L.P. Debtor.

CASE NO. 12-50073-LMC (Chapter 11) Jointly Admistered

RESPONSE OF PACA TRUST CREDITORS COOSEMANS HOUSTON, INC., EAGLE EYE PRODUCE, INC., MECCA FARMS, INC., AND TEXAS SWEET POTATO, LLC TO JENSENS OMNIBUS OBJECTIONS TO PACA TRUST CREDTIORS APPLICATIONS FOR ATTORNEYS FEES Come Now Coosemans Houston, Inc., Eagle Eye Produce, Inc., Mecca Farms, Inc., and Texas Sweet Potato, LLC, PACA Trust Creditors of Delta Produce, L.P. and Superior TomatoAvocado, Ltd., by and through undersigned counsel, and in response to Jensens Omnibus Objections to PACA Trust Creditors Applications for Attorneys Fees, (Docket No. 331), state as follows: 1. On October 2, 2012, Debtor Walter Scott Jensen (Jensen) filed an objection to

the PACA Trust creditors applications for attorneys fees on the grounds that PACA Trust creditors are unsecured debtors and are not entitled to attorneys fees pursuant to In re Seda France, Inc., 2011` Bankr. LEXIS 2874 (Bkrtcy. W.D. Tex. 2011). (Docket No. 331). However, in the PACA context, the holding in Seda is inapposite because it assumes that the debt at issue is part of the bankruptcy estate. 2. PACA Trust assets are not part of the bankruptcy estate. Tom Lange Co. v.

Kornblum & Co., Inc. (In re Kornblum & Co., Inc.), 81 F.3d 280, 284 (2d Cir. 1996) See also 11

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U.S.C. 541(d). Rather, the estate holds trust property subject to the outstanding interest of the beneficiaries. In re: Fresh Approach II, 51 B.R. at 419. 3. PACA Trust creditors that properly preserve their trust rights enjoy a trust claim

superior to all other creditors, whether secured or not. Nickey Gregory Company, LLC, et al. v. Agricap, LLC, 597 F.3d 591, 595 (2d Cir. 2010); In re Konblum, 81 F.3d zt 284 (PACA trust beneficiaries are entitled to claim trust property ahead of even creditors holding security interests in the property). See also In re: Fresh Approach II, 51 B.R. 412, 419 (N.D. Tex. 1985) (citing In re Kennedy & Cohen, Inc., 612 F.2d 963, 965 (5th Cir. 1980) that the beneficiary of such a trust would be entitled to priority in payment as to all the assets of the bankrupt, ahead of the claims of creditors who have valid security interests, ahead of the administrative costs and expenses incurred in this court and ahead of all other priority and general creditors.) (emphasis added). 4. Jensen does not argue that any of the PACA Trust creditors that submitted claims

for attorneys fees also failed to properly preserve its rights. 5. When parties include contractual terms for attorney fees on their invoices, the

attorneys fees are considered sums owing in connection with the PACA transaction, and accordingly are part of the PACA Trust. See Middle Mountain Land and Produce, Inc. v. J.R. Simplot Company, 307 F.3d 1220, 1224-25 (9th Cir. 2002); Country Best v. Christopher Ranch, LLC, 361 F.3d 629, 632 (11th Cir. 2004) (finding that the term sums owing in connection with includes not only the price of commodities but also . . . attorneys fees and interest that buyers and sellers have bargained for in their contracts.). Accord May Produce Co. v. East West Imps. Inc., 2009 U.S. Dist LEXIS 117076 (N.D. Tex. Dec. 15, 2009); Ruby Robinson Co v. Kalil Fresh Marketing, Inc., 2009 U.S. Dist LEXIS 96366 (S.D. Tex., Oct. 16, 2009).

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6.

To the extent that each PACA Trust creditor has a contractual basis for its claim

to attorneys fees, the PACA Trust creditor is entitled to those sums whether the PACA Trust debtor is in bankruptcy or not. 7. Finally, the court granted Special Counsels Motion, recognizing PACA

Creditors right to recovery attorneys fees. (Docket No. 331). For the foregoing reasons, Coosemans Houston, Inc., Eagle Eye Produce, Inc., Mecca Farms, Inc., and Texas Sweet Potato, LLC oppose Jensens Omnibus Objections.

Respectfully submitted this 5th day of October, 2012.

By:

/s/ Diana M. Geis Diana M. Geis, Esq. State Bar No. 14069700 Curl & Stahl, P.C. 700 N. St. Mary's Street, Suite 1930 San Antonio, Texas 78205 (210) 226-2182 (210) 226-1691 Fax dmgeis@curlstahl.com

and By: /s/ Blake Surbey Blake A. Surbey, Esq. McCarron and Diess 4530 Wisconsin Avenue, NW Suite 301 Washington, DC 20016 (202) 364-0400 (202) 364-2731 Fax bsurbey@mccarronlaw.com Pro Hac Vice Counsel for Mecca Farms, Inc., Coosemans Houston, Inc., Texas Sweet Potato, LLC, and Eagle Eye Produce, LLC
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