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‘Declarations’ pave way for resolution to Dean settlement offer claims

Progressive Dairy Editor Dave Natzke Published on 07 December 2020

The Pennsylvania Milk Marketing Board (PMMB), in collaboration with the Pennsylvania Attorney General and ASK LLP, have developed declaration forms that may help dairy farmers and milk haulers navigate avoidance claim settlement offers related to the bankruptcy of Dean Foods.

The farmer and hauler declaration forms and supporting information can be downloaded from the PMMB website. According to Douglas Eberly, PMMB chief counsel, the declaration forms should be acceptable for dairy producers and milk haulers in any state.

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Beginning earlier this fall, ASK LLP, a law firm based in St. Paul, Minnesota, began sending letters to all companies that received Dean payments during the 90-day period prior to the company filing for bankruptcy on Nov. 12, 2019. Under 11 US.C. § 547 of U.S. bankruptcy code, payments made by a company during the final 90 days prior to the filing of bankruptcy are considered “preference” payments and are subject to “claw back” provisions by bankruptcy trustees seeking to acquire necessary funds to pay remaining claims.

In this case, some dairy farmers and milk haulers who received Dean payments for milk deliveries, beginning approximately Aug. 14 through Nov. 11, 2019, received avoidance claim settlement offers from ASK LLP, seeking at least partial collection of original milk or hauling payments. It’s estimated about 500 U.S. dairy producers and about 100 producers and haulers in Pennsylvania, received the letters.

Read: Producer defenses to Dean ‘preference’ payment demand letters mount and Dairy farmers asked to return Dean ‘preference’ payments.

One legal defense against the claims is when the payments received by farmers and haulers from Dean were in the “ordinary course of business.”

In an explanation letter from PMMB, board Chair Robert Barley and member James Van Blarcom say they believe the payments received by dairy farmers and milk haulers covered milk and transaction as part an “ordinary course of business” with Dean and not subject to the avoidance claim provision.

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The PMMB, working the Pennsylvania Attorney General and ASK LLP, developed “Farmer Declaration” and ”Hauler Declaration” forms to resolve the claims.

Farmers and haulers should complete the appropriate declaration, entering the ASK file number contained on their letter, the date they received correspondence from ASK and brief details regarding their relationship with Dean.

After completing and signing the declaration, it should be returned via email, fax, or U.S. mail to the paralegal assigned to the matter (noted in the letter from ASK LLP).

If the declaration, along with payment information ASK has, appears sufficient, ASK will contact its client to request permission to close the file. When the file is closed, ASK will inform the farmer or hauler, according to PMMB.

AFBF sends letter

On Dec. 4, the American Farm Bureau Federation (AFBF) sent a letter to ASK LLP, calling for an immediate reversal of their “predatory shakedown” and threatening potential legal action if the firm failed to withdraw the letters sent to farmers. In the letter, AFBF General Counsel Ellen Steen said the letters sent to farmers “are deceptive and constitute an abuse of process that attempts to extract funds that the debtor (Dean Foods) is not entitled to under the threat of a lawsuit. Put plainly, your letters are a predatory shakedown, written in legalese.”  end mark

Dave Natzke
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