The U.S. Department of Agriculture filed an administrative action against Philadelphia-based Phillies Tomato & Produce Corp. for violations of the Perishable Agricultural Commodities Act.

Phillies allegedly failed to pay 26 creditors about $1.2 million, according to a release from the USDA’s Agricultural Marketing Service. That amount was for 289 lots of perishable agricultural commodities the company purchased, received and accepted from May to October of 2007.

The company, which is no longer operating, will have an opportunity to request a hearing, according to the release. If the company is found to have committed repeated PACA violations, its principals could not be employed by or affiliated with any PACA licensee for one year and then only with the posting of a USDA-approved surety bond.

According to documents filed in the U.S. District Court for the Eastern District of Pennsylvania on July 16, the PACA trust administrator collected and liquidated Phillies Tomato’s PACA trust account in the amount of $236,078.22.

Proceeds were distributed on a pro rata basis to the 26 creditors. The largest creditor, KB&R Trading Corp., Tinton Falls, N.J., received a settlement for $111,921.17, or 44% of the total PACA amount distributed.

Some of Phillies’ other large creditors included Wm. Rosenstein & Sons Co., Scranton, Pa.; Wiers Farms Inc., Willard, Ohio; V.F. Lanasa Inc., Richmond, Va.; and American Blueberries, Rocky Point, N.C.