7 U.S.C. § 197

Statutory trust established; poultry

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(a) Protection of public interest from inadequate financing arrangements

It is hereby found that a burden on and obstruction to commerce in poultry is caused by financing arrangements under which live poultry dealers encumber, give lenders security interest in, or place liens on, poultry obtained by such persons by purchase in cash sales or by poultry growing arrangements, or on inventories of or receivables or proceeds from such poultry or poultry products therefrom, when payment is not made for the poultry and that such financing arrangements are contrary to the public interest. This section is intended to remedy such burden on and obstruction to commerce in poultry and protect the public interest.

(b) Poultry, inventories, receivables and proceeds held by dealer in trust for benefit of unpaid cash sellers or poultry growers

All poultry obtained by a live poultry dealer, by purchase in cash sales or by poultry growing arrangement, and all inventories of, or receivables or proceeds from such poultry or poultry products derived therefrom, shall be held by such live poultry dealer in trust for the benefit of all unpaid cash sellers or poultry growers of such poultry, until full payment has been received by such unpaid cash sellers or poultry growers, unless such live poultry dealer does not have average annual sales of live poultry, or average annual value of live poultry obtained by purchase or by poultry growing arrangement, in excess of $100,000.

Payment shall not be considered to have been made if the cash seller or poultry grower receives a payment instrument which is dishonored.

(d) Preservation of trust benefit by seller or poultry grower

The unpaid cash seller or poultry grower shall lose the benefit of such trust if, in the event that a payment instrument has not been received, within 30 days of the final date for making payment under section 228b–1 of this title, or within 15 business days after the seller or poultry grower has received notice that the payment instrument promptly presented for payment has been dishonored, the seller or poultry grower has not preserved his trust under this section. The trust shall be preserved by giving written notice to the live poultry dealer and by filing such notice with the Secretary.

(e) Definition of cash sale

For the purpose of this section, a cash sale means a sale in which the seller does not expressly extend credit to the buyer.

(Aug. 15, 1921, ch. 64, title II, § 207, as added Pub. L. 100–173, § 4, Nov. 23, 1987, 101 Stat. 918.)Statutory Notes and Related SubsidiariesEffective Date

Section effective 90 days after Nov. 23, 1987, see section 12 of Pub. L. 100–173, set out as an Effective Date of 1987 Amendment note under section 182 of this title.

Notes of Decisions

Cited in 6 cases, 1991–2015 · leading case: Samson Resources Co. v. SemCrude, L.P. (In re SemCrude, L.P.), 407 B.R. 140 (Bankr. D. Del. 2009).

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Samson Resources Co. v. SemCrude, L.P. (In re SemCrude, L.P.), 407 B.R. 140 (Bankr. D. Del. 2009). “shall be held by such packer in trust for the benefit of all unpaid cash sellers of such livestock until full payment has been received by such unpaid sellers”) (emphasis added); 7 U.S.C. § 197 (“All poultry obtained by a live poultry dealer .”

In Re Roxford Foods Litig., 790 F. Supp. 987 (E.D. Cal. 1991). “The operative statutory provisions at issue in this litigation are set forth in 7 U.S.C. § 197 (a) & (b): (a) Protection of public interest from inadequate financing arrangements It is hereby found that a burden on and obstruction to commerce in poultry is caused by financing…”

Jackson v. Swift-Eckrich, 830 F. Supp. 486 (W.D. Ark. 1993). “1991); 7 U.S.C. § 197 (a) & (b). The “Act is clearly remedial and is to be construed broadly to effect its purpose of protecting suppliers of livestock.”

Blackhawk Network, Inc. v. Alco Stores, Inc. (In re Alco Stores, Inc.), 536 B.R. 383 (Bankr. N.D. Tex. 2015). · cites it 3× “See 7 U.S.C. § 197 (b) (2015). . Wellness Intern.”

Jackson v. Swift Eckrich, Inc., 53 F.3d 1452 (8th Cir. 1995). “See 7 U.S.C. §§ 197 , 228(b)(1), (2). The trust provision protects poultry growers in the event of a buyer bankruptcy and the prompt payment provision regulates the time for payment of producers.”

In re Coop de Consumidores del Noroeste, 464 B.R. 525 (Bankr. D.P.R. 2012). · cites it 7× “Section 207 of PASA, 7 U.S.C. § 197 (b), (c) and (d) is the corresponding provision for the statutory *539 trust established for unpaid cash sellers of poultry or poultry growers.”

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