There likely won’t be full payment for dozens of produce suppliers that are allegedly collectively owed almost $1 million by Cal-O Vegetable Exchange Inc., which closed its doors earlier this year after 46 years in business.
The Los Angeles produce company is liquidating assets through a federal court action known as an assignment for the benefit of creditors, but attorney John Lapinski, of Clark & Trevithick in Los Angeles, said he doubts there will be enough to pay everyone all they may be owed.
“There was a critical shortage of cash and creditors at the door when they closed up,” said Lapinski, who is representing Cal-O’s president and vice president, Thomas Kunisaki and his son Scott Kunisaki, respectively.
Lapinski said the Kunisakis realized they needed to take action and voluntarily closed to begin the liquidation process. They have been working with lawyers for the Perishable Agricultural Commodities Act creditors and other industry players through the process.
One step, Lapinski said, by Cal-O was to quickly vacate the bays it had been renting at a produce terminal so the landlord could re-rent them. Lapinski said a variety of factors contributed to the problems at Cal-O, including the economic downturn in 2008-09, which the company did not overcome.
According to a schedule set by U.S. District Court Judge Dale Fischer, the anticipated date of an interim distribution to creditors with valid claims under PACA is Aug. 6.
A group of seven suppliers initially filed in federal court on May 14 seeking payment of a total of $318,245 through a PACA proceeding. Another 22 companies joined in an amended complaint on June 8, increasing the total to $851,837.
Seven more produce companies filed as interveners to the original case, seeking another $112,497 between them and bringing the total of PACA claims to $964,333. Court records show the suppliers delivered the produce from June 2011 through April this year.
The individual PACA debts listed in the court records range from a low of $2,700 to a high of $86,503. The five largest listed were:
- Keber Distributing Inc, Thermal, Calif., $85,503;
- Boskovich Farms Inc., Oxnard, Calif., $75,114;
- Pacific Pride Marketing LLC, Oxnard, Calif., $74,774;
- Baloian Packing Co. Inc., Fresno, $65,653; and
- A.V. Thomas Produce Inc., Livingston, Calif., $62,106.