Under PACA Law, Unpaid Sellers Of Perishable Ag Products Have Priority Over Buyer’s Secured Creditor

LexisNexis (January 25, 2019, 1:51 PM EST) -- A wholesaler sells goods to a distributor on open account. The distributor resells the goods to retailers on open account, but fails to pay its bill to the wholesaler. The distributor’s financer has a perfected security interest in the distributor’s receivables. Who has priority to the distributor’s receivables generated by resale of the goods? The normal commercial law rule is that an unpaid, unsecured supplier of goods can’t recover the receivables generated by their resale, as against the buyer’s secured lender. That’s because a secured creditor trumps an unsecured creditor. UCC § 9-201(a)....