Can a debtor with PACA trust debts effectively reorganize?
If all of the debtor’s assets are impressed with the PACA trust, reorganization will obviously be difficult since the debtor has no right to use the assets for any purpose other than paying PACA trust creditors. Reorganization is only possible if the debtor can provide the trust beneficiaries with adequate protection that their trust assets will not be dissipated and provide for prompt payment outside of the plan for reorganization.
