Pamma Farms: Chapter 11 Land Sales And Examiner Fight

Sukhraj S. Pamma filed chapter 11 in the U.S. Bankruptcy Court for the Eastern District of California (Case No. 24-23489) on August 7, 2024, citing low commodity prices, higher interest rates, and rising operating costs. The docket since then includes a $13.2 million land sale, plan negotiations with secured lenders, fee disputes, and a governance dispute over an undisclosed bank account that led to the appointment of a chapter 11 examiner in December 2025.

Debtor	Sukhraj S. Pamma (d/b/a Sukhraj S. Pamma Farms)
Court	U.S. Bankruptcy Court, Eastern District of California (Sacramento Division)
Case Number	24-23489
Petition Date	August 7, 2024
Judge	Hon. Christopher D. Jaime

Commodity Pressure and Secured Debt Load

The Voluntary Petition opened the case on August 7, 2024. In a later status report, the debtor said he owned multiple real estate parcels and ran farming operations through affiliated entities. That same Status Report said the initial chapter 11 strategy was to preserve the 2024 harvest, sell selected parcels, and negotiate with secured lenders over which properties remained necessary to ongoing operations. The debtor expected to pursue asset sales within roughly 60 to 90 days while using chapter 11 breathing room to restructure debt.

The debtor told the court that low commodity prices, rising interest rates, and higher operating costs drove the filing. California led the nation in 2024 farm bankruptcies, and industry reporting on California almond farms described sustained low almond prices, high interest rates, and a rising cost of capital across the sector. Separate 2025 reporting on farm bankruptcies likewise tied recent filings to lower commodity prices, higher input costs, and heavier debt burdens.

The Schedule D excerpts reported aggregate secured debt of about $34.25 million. Major scheduled secured claims included about $11.3 million owed to AgWest Farm Credit, about $2.7 million owed to Rabo AgriFinance (with a separate entry listed as "Rabo Bank" at about $1.6 million), about $1.9 million owed to Citizens Business Bank, about $1.9 million owed to UFS West LLC, and about $2 million owed to FBN/Compeer. Smaller scheduled secured claims included about $111,500 owed to Golden 1 Credit Union and about $90,000 owed to Blue Bridge Financial. The schedules also showed tax-collector secured claims, including a Butte County Tax Collector entry around $150,000 and a Sutter County Treasurer entry around $200,000, along with additional secured debt to equipment and trade-related creditors.

619-Acre Sale to Shinda Upple Group

A January 28, 2025 sale motion sought approval to sell roughly 619 acres in Butte and Sutter Counties free and clear of liens. The motion proposed bidding protections for the stalking-horse structure, including a $150,000 break-up fee.

The report of sale stated that the transaction closed on June 11, 2025 for $13.2 million, with the Shinda Upple Group as buyer. The sale covered about 619.83 acres, and net proceeds were held in escrow while liens attached to those proceeds pending later distribution demands and court direction. The final price exceeded the original $7.8 million stalking-horse bid by $5.4 million.

Amended Plan, Secured Classes, and Repeated Continuances

The debtor filed a first amended chapter 11 plan and amended disclosure statement on April 30, 2025, with a confirmation hearing initially set for June 17, 2025. The plan contemplated 18 separate secured-creditor classes plus two general unsecured classes. Many secured-class recoveries were tied to collateral liquidation and distribution of sale proceeds, while certain classes such as Regis Bear Inc. and Wells Fargo would be reinstated. The amended disclosure statement said administrative claims would be paid in full as soon as practicable after the effective date or allowance, and priority tax claims would be paid in installments over a period not exceeding five years from the petition date.

The plan had not reached confirmation as of the latest filings. A November 4, 2025 civil minutes entry continued the plan status conference, and a later December 16, 2025 civil minutes entry did the same. As of those late-2025 entries, the case remained in chapter 11 administration with plan proceedings still unresolved.

Undisclosed Five Star Account and Examiner Appointment

In November 2025, Rabo AgriFinance filed a motion to appoint a trustee or examiner alleging that the debtor failed to disclose a Five Star Bank account ending in 2769, continued to use it after the petition date, and routed substantial transactions through it outside ordinary chapter 11 controls. The motion said hundreds of checks and electronic transfers totaling more than $1 million moved through that account postpetition and argued that the debtor used affiliated entities and undisclosed transfers in ways that justified fiduciary replacement or at least independent investigation.

The court did not appoint a trustee at that stage, but it did enter an order granting examiner relief. That order appointed an examiner under section 1104(c), required an interim report within 90 days, and directed an investigation into the debtor's acts, transactions, financial condition, related entities, and transfers, with particular focus on the Five Star account. The order also contained escalation language: if the examiner's final report identifies transfers that would benefit the estate if avoided, the court will order the U.S. Trustee to appoint a chapter 11 trustee upon filing and approval of the report without another hearing.

The court later approved the U.S. Trustee's request to appoint Michael W. Carmel as examiner through an appointment order, followed by the notice of appointment and acceptance of appointment. By February 19, 2026, the examiner had filed a motion for examination relief under Rule 2004, indicating that the investigation phase was active rather than complete.

Surcharge Dispute and Loeb & Loeb Fee Litigation

In August 2025, the debtor filed a surcharge motion seeking about $1.21 million from AgWest sale proceeds, consisting of at least $75,000 in unpaid professional fees and roughly $1.135 million in operating expenses. The motion tied those preservation expenses to licenses, permits, repairs, maintenance, chemicals, utilities, and related operational costs incurred to maintain and market the properties sold in June 2025. The debtor attributed the $5.4 million increase above the stalking-horse bid to those preservation efforts.

A December 22, 2025 stipulation and order approved a $550,000 surcharge instead of the amount originally requested. The order directed specified distributions to the U.S. Trustee, Napier & Follett ($13,200), Donlin Recano ($21,306.50), and Loeb & Loeb, with the remaining balance held in trust for later U.S. Trustee and allowed professional-fee payments unless the court ordered otherwise.

Fee litigation continued into early 2026. Loeb & Loeb's first interim fee application had sought $432,667 in fees and $8,359.26 in expenses for work through March 31, 2025. The firm's second interim fee application sought $298,405.50 in fees and $11,832.96 in expenses for work performed from April 1 through December 31, 2025, emphasizing asset dispositions, plan and disclosure statement work, and contested matters including conversion and stay-relief fights. After a U.S. Trustee objection, Loeb agreed to a voluntary reduction of $11,574.90 in fees and $127.44 in expenses described in its reply, and the court's interim fee order approved $230,000 in interim fees and $11,705.52 in expenses, subject to refund on final allowance and conditioned on sufficient funds to pay anticipated administrative expenses. The civil minutes for the February 24, 2026 hearing confirmed approval on an interim basis. As of that order, allocation of sale proceeds among lenders, professionals, and other administrative claimants remained pending alongside the examiner's investigation.

Frequently Asked Questions

Who is the claims agent for Sukhraj S. Pamma Farms?

Donlin, Recano & Company serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

What caused the Pamma Farms bankruptcy filing?

The debtor cited low commodity prices, higher interest rates, and rising operating costs as the factors that left his farm operation unable to meet obligations as they came due. California led the nation in farm bankruptcies in 2024, and industry reporting attributed the increase to similar pressures across the state's agricultural sector.

Why was a chapter 11 examiner appointed?

Rabo AgriFinance filed a motion alleging that the debtor failed to disclose a Five Star Bank account and routed more than $1 million in postpetition transactions through it. The court declined to appoint a trustee but ordered an examiner under section 1104(c) to investigate the debtor's financial condition and transfers. The examiner order includes automatic trustee-trigger language tied to the final report.

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