Statutory Trusts Under the Packers and Stockyards Act
Packers, dealers, and live poultry dealers are required to hold certain assets in trust for the benefit of unpaid cash livestock sellers and poultry growers. These trusts give eligible livestock sellers and growers a legal claim to certain buyer assets, elevating their claims above those of secured lenders.
Dealers, packers, and live poultry dealers must fully distribute proceeds from the affected trust assets to unpaid sellers of livestock and poultry with valid trust claims until claims are paid in full. When trust assets are insufficient to pay all valid claimants in full, proceeds should be issued in pro rata. Livestock sellers can increase the likelihood of receiving full payment for livestock by filing a trust claim initially, and later filing a bond claim, which could pay out for some or all of the obligations not covered by the trust claims.
For specifics on each of the trusts, including detailed information on who can file trust claims, how and when to file trust claims, and assets covered by trusts, see the following links:
Packers and Stockyards Statutory Trusts
The following publications provide more information about what livestock and poultry sellers and poultry growers must do to preserve their rights under the PSD trusts: