On August 18, 2009, the United States Department of Agriculture (USDA) announced in a news release that the department was filing an administrative order alleging Phillies Tomato & Produce Corp. “committed willful, repeated, and flagrant violations of the Perishable Agricultural Commodities Act" (PACA).
PACA gives the USDA authority to revoke or suspend a trader’s license for violating the act. The act itself deals with business conduct for interstate traders for the produce industry. The act requires traders in fresh or frozen fruits and vegetables to be licensed by the department.
According to the USDA news release, the department alleges the Philadelphia, PA-based company did not promptly make full payment to 26 sellers for agreed prices or outstanding balances. The release alleges the company failed to make $1,241,848.35 in payments for “289 lots of perishable agricultural commodities, which the company purchased, received, and accepted in the course of interstate commerce during the period of May 2007 through October 2007.”
Phillies Tomato & Produce Corp. has the opportunity to request a hearing. A violation of the act could result in the traders involved in the alleged actions being banned from employment by “any PACA licensee for one year and then only with the posting of a USDA-approved surety bond.” Additionally, the company could be “barred” from the produce industry for up to two years.
According to a story by Bob Luder for The Packer, the company is no longer operating. The PACA administrator has already “collected and liquidated Phillies Tomato’s PACA trust account in the amount of $236,078.22.” That, according to court documents filed in the U.S. District Court for the Eastern District of Pennsylvania. Apparently, the funds from the trust were distributed to the 26 creditors on a pro rata basis.
To read the USDA news release on these allegations click here.
PACA gives the USDA authority to revoke or suspend a trader’s license for violating the act. The act itself deals with business conduct for interstate traders for the produce industry. The act requires traders in fresh or frozen fruits and vegetables to be licensed by the department.
According to the USDA news release, the department alleges the Philadelphia, PA-based company did not promptly make full payment to 26 sellers for agreed prices or outstanding balances. The release alleges the company failed to make $1,241,848.35 in payments for “289 lots of perishable agricultural commodities, which the company purchased, received, and accepted in the course of interstate commerce during the period of May 2007 through October 2007.”
Phillies Tomato & Produce Corp. has the opportunity to request a hearing. A violation of the act could result in the traders involved in the alleged actions being banned from employment by “any PACA licensee for one year and then only with the posting of a USDA-approved surety bond.” Additionally, the company could be “barred” from the produce industry for up to two years.
According to a story by Bob Luder for The Packer, the company is no longer operating. The PACA administrator has already “collected and liquidated Phillies Tomato’s PACA trust account in the amount of $236,078.22.” That, according to court documents filed in the U.S. District Court for the Eastern District of Pennsylvania. Apparently, the funds from the trust were distributed to the 26 creditors on a pro rata basis.
To read the USDA news release on these allegations click here.
To read the Packer story click here.
Posted: 08/24/09
