The company violated the Perishable Agricultural Commodities Act by not paying $3,540,297 to 28 sellers for 470 lots of produce, according to a USDA-Agricultural Marketing Service news release.
Eden Prairie, Minn.-based C.H. Robinson Worldwide, Inc. claims $566,246 in the case, according to court documents filed by CHR. Tom Lange Co., Inc. and Dayka & Hackett LLC each claimed more than $400,000.
The company cannot operate in the produce industry until April 24, 2014, when it can reapply for a PACA license, according to the USDA. Its principals, Thomas Bastounes and Paul Duggan, may not be employed by or affiliated with any PACA licensee until April 24, 2013.
Legal actions continue, said attorney Priscilla Grannis. Grannis, of Newport Beach, Calif.-based Rynn & Janowsky LLP, represents creditors grouped with Tom Lange Co.
Creditors are pursuing actions against Duggan, who in December filed for dismissal of all claims on the grounds that he was a passive investor in Auster Aqcuisitions, Grannis said. The PACA claimants are disputing that in counter motions filed May 10.
“We have a strong case, and he is a valid source of recovery," Grannis said. "I don’t know whether it will be the complete shortfall. We will also be looking at another source of recovery, Standard Bank and Trust Co.”
Auster Acquisitions had accounts at the bank. “We believe they may be in receipt of PACA Trust assets,” Grannis said.
Bastounes filed for bankruptcy, according to Grannis.
“We are proceeding against him separately in bankruptcy court,” she said. “We’re looking to preserve our claims against him.
“I think originally there were about $4 million in claims, and we have reduced that down to $3 million or so. Auster did have receivables that were collected."
A partial list of claims includes:
- C.H. Robinson Worldwide Inc., $566,246;
- Tom Lange Co. Inc., $475,964;
- Dayka & Hackett LLC, $431,297;
- Domex Superfresh Growers LLC, $256,985;
- EJ’s Produce Sales Inc., $240,835;
- Scattaglia Growers & Shippers LLC, $206,965;
- Jack Tuchten Wholesale Produce Inc., $129,463;
- New Era Produce LLC, $127,177;
- Produce Plus Inc., $91,168;
- Nico Mexi Foods Inc., $83,702;
- Quality Food Products Inc. $68,442;
- Kiko’s Produce Inc., $57,977;
- Durango's Products Inc. $54,851;
- Keith Connell, Inc., $47,193;
- Veg-Pro Inc., $42,417;
- West Coast Tomato LLC, $41,589;
- New York Apple Sales Inc., $37,452;
- RPE Inc., $30,645;
- Strube Celery & Vegetable Co., $29,966;
- J.L. Gonzalez Produce Inc., $29,232;
- T.J. Produce Inc., $18,454;
- Central Washington Marketing Inc., $16,519;
- Ruby Robinson Co. Inc., $13,988;
- Get Fresh Produce Inc., $13,874;
- Georgia Vegetable Co. Inc., $13,443;
- Everyday Fresh Produce Inc., $12,327;
- Hughes Produce Sales Inc., $12,302;
- Truong Enterprises Inc., $11,891; and
- Evergreen International Inc., $11,401.