Case No. 02-B02474 (Jointly Administered)United States Bankruptcy Court, N.D. Illinois, Eastern Division
February 13, 2002
FINAL ORDER (I) PROVIDING ADMINISTRATIVE EXPENSE TREATMENT FOR PACA AND PASA TRUST CLAIMS PROCEDURES AND (II) ESTABLISHING PROCEDURES FOR RESOLUTION AND PAYMENT OF PACA AND PASA CLAIMS
SUSAN PIERSON SONDERBY, United States Bankruptcy Judge.
Upon the motion, dated January 22, 2002 (the “Motion”), wherein Kmart Corporation (“Kmart”) and certain of its domestic subsidiaries and affiliates, debtors and debtors-in-possession in the above-captioned cases (collectively, the “Debtors” or the “Company”), moved this Court for entry of an order to (i) provide administrative expense treatment for PACA and PASA trust claims (“PACA/PASA Claims”) under the Perishable Agricultural Commodities Act of 1930, as amended, 7 U.S.C. § 499a et seq. (“PACA”) and the packers and Stockyards Act of 1921, as amended, 7 U.S.C. § 181 et seq. (“PASA”) and establish procedures for resolution and payment of PACA/PASA Claims; it appearing to the Court that (i) it has jurisdiction over the matters raised in the Motion pursuant to 28 U.S.C. § 157 and 1334; (ii) this is a core proceeding pursuant to § 570(b)(2); (iii) the relief requested in the Motion is in the best interests of the Debtors, their estates and creditors; (iv) proper and adequate notice of the Motion and the hearing thereon has been given and that no other or further notice is necessary; and (v) upon the record herein, after due deliberation thereon, that the relief should be granted as set forth below,
1. The Debtors are authorized to resolve PACA/PASA Claims in accordance with the PACA/PASA Claims procedures (“Claims Procedures”) set forth below:
a. The Debtors will file a report (the “Report”) within 60 days of the Petition Date, on notice to parties in interest, listing those PACA/PASA Claims, if any, which they deem to be valid;
b. Claimants who are in agreement with the PACA/PASA Claim amount as contained in the Report do not need to do anything.
c. A claimant objecting to the inclusion, omission or amount of any asserted PACA/PASA claim (“Objecting Claimant”) must provide, within 20 days (“the Objection Period”) of the Debtors’ filing of the Report, evidence or documentation demonstrating the basis for the dispute, including a statement identifying which information on the Debtors’ report is incorrect, specifying the correction information, and stating any legal or factual basis for the objection;
d. The failure of an Objecting Claimant to materially comply with subparagraph (c) above shall constitute a waiver of the Objecting Claimant’s right to object to the proposed treatment and allowed amount of such PACA/PASA Claim unless the Court orders otherwise.
e. Any Claimant who fails to object to the PACA/PASA Claim listed on the Report at the end of the Objection Period will be deemed to have assented to the amount of PACA/PASA Claim.
f. The Debtors are authorized to negotiate with all Objecting Claimants and to adjust the PACA/PASA Claim amount to reach an agreement regarding the Objecting Claimant’s PACA/PASA Claim. In the event the Debtors and an Objecting Claimant are able to settle on the amount and/or treatment of the Objecting Claimant’s PACA/PASA Claim, the PACA/PASA Claim will be deemed an allowed PACA/PASA Claim in the settled amount.
g. In the event that no consensual resolution of the Objecting Claimant’s PACA/PASA Claim is reached within sixty (60) days of the Objection Period (or such later date as the parties agree), the Debtors shall file a motion for determination of the Objecting Claimant’s PACA/PASA Claim and set such motion for hearing at the next regularly scheduled omnibus hearing occurring more than twenty (20) days after the filing of the motion for determination, unless another hearing date is agreed to by the parties or ordered by the Court (the “Determination Hearing”). The Objecting Claimant’s PACA/PASA Claim, if any, shall be deemed an allowed PACA/PASA Claim as fixed by the Court in the Determination Hearing or as agreed to by the Debtors and the Objecting Claimant prior to a determination by the Court in the Determination Hearing.
h. The Debtors will pay in full all valid PACA or PASA Claims pursuant to 11 U.S.C. § 503 (b) as an administrative expense.
2. Any action to enforce any alleged PACA/PASA claim, except those brought by the Debtors in accordance with the PACA/PASA Claims Procedures, whether currently pending or initiated in the future, shall be and hereby are, stayed, and the claims asserted therein shall be subject to the PACA/PASA Claims Procedures.