Repayment uncertain for suppliers

PRESQUE ISLE – Growers and suppliers at the Maine Potato Board meeting last week were given few options for recovering money owed to them by Penobscot Frozen Foods Inc., the Belfast company facing foreclosure.

Some Aroostook County firms supply produce to the company, which also has a plant in Washburn.

Foreclosure on the company, a processor of potato specialty foods for 50 years, came after Key Corporate Capital Inc. decided not to renew the company’s line of credit. The company owes the bank $1.5 million.

Some of Penobscot’s products include baked and fried potato skins and frozen baked stuffed potatoes. One of the company’s largest suppliers is County Super Spuds Inc. of Mars Hill.

“I am sure that most of you saw the foreclosure notice in the newspaper,” Don Flannery, Maine Potato Board executive director, said at the April 21 meeting. “I am not sure what scenario to expect there. I expect the plant will continue to run, and [the board] has extended any help that we can give them to make the situation better.”

On April 7, Key Corporate Capital Inc. published a notice in the Bangor Daily News of its intent to sell the company’s properties in Belfast and Washburn at public auction on April 29.

Flannery said that Vernon Delong, executive director of the Agricultural Bargaining Council, had been meeting with County growers to gather information and hear their concerns.

“Some of the growers are owed a considerable amount of money,” Flannery told the board. “There is concern about whether or not they will get paid.”

The concern stems from the fact that Maine has no licensing and bonding law, Flannery said at the meeting.

“When you get to produce, Maine does not require companies to be bonded,” Houlton attorney Dan Nelson said last week. “That means that if a company goes bankrupt or goes out of business, there might not be funds available for vendors and suppliers to get paid.”

Earlier this month, Penobscot Frozen Foods president Rick Starrett said that he is confident the foreclosure can be stopped.

“Vern has been working with the growers to put together information to file a verified complaint,” Flannery said. “Even though there is no bond, some may still want to complain to the Department of Agriculture. I know that is one of the options that has been discussed because of potential neglect on behalf of the state.

“This is a tough situation for growers,” Flannery continued. “The company itself is a valuable part of our industry. It is hard, but we will just have to wait and see what happens after the auction.”