Future recovery rights at heart of PACA case - The Packer

Future recovery rights at heart of PACA case

05/18/2012 04:28:00 PM
Coral Beach

Meuers said if Leara and Klinowski had not “refused to OK a plan for a seven-day budget” so Adams could close up shop in an organized fashion, the financial statements would have been filed long ago.

Both Leara and Klinowski flatly denied having opposed such a plan.

“No PACA creditor has done more to move this case along than John Kontos,” Leara said. “He provided lines of credit to get four of the distribution centers back open, which put about 200 of the Adams employees back to work. He also hired five or six of the employees to work for him.”

Meuers said the people opposing the proposed compromise settlement “have not been intimately involved” in the proceedings or in the work on the settlement. He said he drafted the settlement along with lawyers representing PNC Bank and other parties in the case.

Klinowski agreed that he had not been involved, but only because he had not been invited to the negotiation table.

“If anyone would have said you can have 80 cents to a dollar on your claims without the liability release required, we would have said yes,” Klinowski said.

Leara was invited to the negotiations, and would be one of attorneys representing the three largest PACA claimants on a proposed PACA Beneficiary Committee under the proposed compromise. But, he said he isn’t interested in participating and maintains objections to the proposal.

He said until all of Adams’ financial information is available and requirements for his clients to sign away future rights to recover any outstanding balances are off the table he will not support the settlement.

In an adversary complaint opposing the proposed settlement Leara and Klinowski contend that PNC Bank and other entities in the case have illegally taken possession of PACA trust assets. They want the bankruptcy proceedings put on hold until a U.S. District Court can rule on the status of those assets.

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