7 U.S.C. § 217b — Statutory trust established; dealer

(a) Establishment: (1) All livestock a dealer buys in cash sales — plus all inventory, receivables, or proceeds from that livestock — is held by the dealer in trust for the benefit of all unpaid cash sellers of that livestock, until they've been fully paid. (2) A dealer whose average annual livestock purchases don't exceed $100,000 is exempt from this section. (3) For deciding whether "full payment" happened, a payment to an unpaid cash seller isn't considered made if the seller receives a payment instrument that's later dishonored. (b) Preservation of trust: An unpaid cash seller loses the trust's protection unless the seller preserves it by giving written notice to the dealer and filing that notice with the Secretary — (1) within 30 days of the final payment deadline under section 228b, if a payment instrument was never received; or (2) within 15 business days after learning that a payment instrument promptly presented for payment was dishonored. (c) Notice to lienholders: Once the dealer receives notice under (b) that a seller intends to preserve trust benefits, the dealer must, within 15 business days, notify everyone who has recorded a security interest or lien on the livestock held in the trust. (d) "Cash sale" means a sale where the seller doesn't expressly extend credit to the buyer. (e) Buying trust livestock: (1) Someone purchasing livestock subject to a dealer trust gets good title if they (A) paid new value for it, and (B) acted in good faith without notice that the transfer broke the trust. (2) Payment isn't considered made if the payment instrument given for the livestock is dishonored. (3) A transfer isn't "for value" if it's made to satisfy an old debt or is given to a secured party under a security agreement. (f) Enforcement: Whenever the Secretary has reason to believe a dealer covered by this section has failed to carry out its required duties, or that it would serve unpaid cash sellers' best interest, the Secretary must do one or more of: (1) appoint an independent trustee to carry out those duties, preserve trust assets, and enforce the trust; (2) serve as that independent trustee, preserve trust assets, and enforce the trust; or (3) file suit in the federal district court where the dealer resides, to stop the dealer's failure to perform its duties, preserve trust assets, and enforce the trust. Government attorneys can represent the Secretary in that suit, with the Attorney General's approval. Nothing here stops unpaid sellers from filing their own suit to preserve or enforce the trust.