§217b Statutory trust established; dealer

Summary

Dealers must hold any livestock they buy in cash, and the livestock, inventory, receivables, or sale proceeds from those animals, in trust for sellers who have not been paid. The trust lasts until the unpaid sellers get full payment. Dealers whose average yearly livestock purchases do not go over $100,000 are exempt. A cash sale means the seller did not give credit. A payment is not counted as made if the payment instrument is dishonored. An unpaid seller keeps the trust only if they give written notice to the dealer and file that notice with the Secretary either within 30 days after the final payment date under section 228b when no payment instrument was received, or within 15 business days after learning a payment instrument was dishonored. After getting that notice, the dealer must notify anyone who has a recorded security interest or lien on the livestock within 15 business days. A buyer gets good title if they pay new value and buy in good faith without knowing the transfer breaks the trust. The Secretary may appoint or serve as an independent trustee, or sue in federal court, to protect trust assets. Attorneys for the Secretary may represent the Secretary with the Attorney General’s approval, and unpaid sellers may also sue.