Surety bonds come into play in the modern economy. It's really amazing when you see all the uses for a bond that come up in many business situations. Below is an article from The Packer, which goes into just one of those situations. It is where a company had to post a surety bond in order to hire a person. That person was previously employed by a company that was named in a PACA action. Thus, the new company had to post the bond, just in order to hire the former employee. This type of surety bond is known as a fidelity bond and it helps provide assurance against malfeasance or any other item.
A&B Tropical Produce LLC, Miami, has posted a $75,000 surety bond under Perishable Agricultural Commodities Act rules, according to a U.S. Department of Agriculture news release.
The company posted the surety bond with the USDA to employ Marcos Rodas Woo, previously named in a PACA action.
Marcos Rodas Woo was the only member and manager of World Best Tropical LLC, Doral, Fla., a company which failed to pay PACA reparation awards, according to the release.
The Packer reported in January that World Best Tropical failed to pay a $14,720 award in favor of a Florida seller.
PACA rules stipulate the posting of a USDA-approved surety bond by any PACA licensee that wants to employ individuals who have failed to pay a reparation award or have been subject to a USDA disciplinary action.
USDA will hold the $75,000 bond for four years, providing assurance to the industry that the company will be able to pay for produce purchased and to conduct its business according to PACA rules.
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