What type of involvement in a produce company establishes PACA trust liability?
Court decisions show minimum and maximum levels of personal involvement in a produce company necessary to establish personal legal responsibility for the PACA trust obligations. The maximum level of personal involvement is where the individual is the sole shareholder, officer or director of the company and performs all of the company’s duties. These individuals have repeatedly been found to have clear legal responsibility for the company’s PACA trust duties. However, mere ownership of stock in and of itself is not sufficient to make an individual liable if the breach of trust occurred without their knowledge or consent.
