Cimino expected out of bankruptcy next year

12/30/2009 10:11:09 AM
Dawn Withers

Cimino Bros. Produce, Salinas, Calif., is operating in bankruptcy with a smaller staff and pay cuts for its owners.

The company filed for Chapter 11 bankruptcy in November and David Golubchik, the company’s attorney, said the three owners have agreed to cut monthly salaries collectively by $20,000 to reduce costs.

Though Golubchik said he doesn’t know the number employees before the filing, the company is operating with nine employees in Salinas and 15 in Laredo, Texas, where Cimino owns a cooler.

The company is in “positive” territory, Golubchik said, is making money and “has a very bright future.”

According to court documents filed Nov. 24, company partners Armand Cimino, who has a 25% stake, Stephanie Cimino, who holds another 25% stake, and Vincent Cimino, who has the remaining 50% stake in the company, voted unanimously Nov. 14 to enter Chapter 11 bankruptcy protection. The company lists about 200 creditors who are owed from $10 to $50 million in its bankruptcy filings.

Vincent Cimino referred questions to his attorney.

Cimino Bros.’ financial issues started in October, when a $6.5 million loan from Wells Fargo came due, Golubchik said. Wells Fargo seized its bank account containing $255,000.

In the three weeks before the filing, Golubchik said the company operated with no cash, unable to pay vendors or employees

Cimino Bros. “still had very loyal employees and people who continue to do business with them knowing the funds were seized,” Golubchik said.

The company has until March to meet with creditors and work out a business plan — which needs court approval — to pay back Wells Fargo and others, Golubchik said. Cimino Bros. should be out of bankruptcy by spring, he said.

Cimino Bros. primarily grows broccoli, with operations in Mexico under Cimino Bros. Co. Produce Mexico, formed in 1998. The company developed the largest national network of Asian foodservice distributors, according to court filings. The company reported strong growth between 2004 and 2007, when revenues jumped from $14.6 million to $20.7 million.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Feedback Form
Leads to Insight