In 2001, Del Monte Foods and Inprotsa, a pineapple grower in Costa Rica, entered into a growing contract. However, by March 2014, Del Monte filed a breach of contract claim against the grower in the International Court of Arbitration Court. Del Monte alleged the grower began selling pineapples originating from the 61 million MD-2 seed provided to the grower to competitors instead of returning the seed back to Del Monte after the contract expired. On June 16, 2016, the arbitrator awarded $32 million to Del Monte. On December 6, 2016, a district court in Florida, rejected Inprotsa request to vacate the arbitration award due to the lack of new evidentiary support. Unfortunately, the judge did not affirm the award as requested by Del Monte. On March 27, 2017, the Eleventh Circuit remanded Inprotsa appeal request back to the lower court in Florida, questioning if the lower court’s decision was appealable since the award was never affirmed by the lower court.
The case was later transferred to federal court and in May 2017 the federal court refused to affirm Del Monte’s request to force a third party to garnish the debt owed by Inprotsa. Since the arbitral award was not affirmed by the judge back in December of 2016. For Del Monte’s sake let’s hope Inprotsa doesn’t file bankruptcy to avoid paying the award. However, if the debt was acquired as a result of fraud or misrepresentation it cannot be discharged under Chapter 7 but it can possibly be discharged if filed as a Chapter 11. Since the award has not been affirmed, the concerns regarding bankruptcy are a bit predestined. If Inprotsa did file bankruptcy, the company must consider whether filing Chapter 11 as a corporation or Chapter 12 as a farmer provided the most protection. Chapter 12 allows farmers to repay back part of their debt over a period of three to five years. While Del Monte was the lead plaintiff in this suit, Del Monte was recently on the receiving end of a lawsuit filed by Walmart late last year. For more information about this suit please read my “Kiss my Starkist is what Walmart is Telling the Company in a Recent Lawsuit”
Jillian Hishaw, Esq. LL.M. (Agricultural Law) has over a decade of professional experience in agriculture and is the Founder and Director of F.A.R.M.S. a regional non-profit in the Southeast that provides legal and technical services to small farmers. Hishaw is also the owner of Hishaw Law LL.C. For more information about Hishaw’s work please visit www.hishawlaw.com or www.30000acres.org.
Resources:
Del Monte To Get Clarification On $32M Pineapple Award
Del Monte Can’t Garnish Debt For $32M Award, Judge Affirms
Inversiones y Procesadora Tropical INPROTSA, S.A. v. Del Monte International GMBH, No. 1:2016cv24275 – Document 47 (S.D. Fla. 2017)
Chapter 12 – Bankruptcy Basics
