GOULDSBORO, Maine — A Massachusetts-based firm that has several lobster buying stations along the Maine coast and a processing plant in the local village of Prospect Harbor still is working to straighten out its cash flow problems, a company official said Monday.
Lobster Web Co. has not been buying or processing lobster for more than two weeks, since TD Bank froze its checking accounts on March 23. Officials with the bank have declined to comment on the situation.
The company, which is owned by Live Lobster in Chelsea, Mass., has money in those frozen accounts and has been trying to line up different financing through another lender, according to Vice President Toni Lilienthal.
The company has not been operating because it has not been able to write checks to pay its employees or the fishermen it buys lobster from, Lilienthal has said. She said Monday that Lobster Web still is trying to fix the problem.
“Hopefully, it will work out,” Lilienthal said.
Attempts on Monday to reach Live Lobster officials Antonio Bussone and Thad Reece at the company’s main office in Chelsea, Mass., were unsuccessful.
Last November, Lobster Web bounced multiple checks that were written out to fishermen at locations along the Maine coast. The latest problem affects all the company’s operations, Lilienthal has said.
Bussone, Live Lobster’s president, said last fall the company was adjusting to unfamiliar financial operations associated with its new lobster processing facility in Gouldsboro. Until last summer, when it reopened the former Stinson sardine cannery as a lobster processing plant, Live Lobster had functioned solely as a lobster buyer and distributor, flying live lobsters to Europe and the West Coast within days of the lobster being caught.
With its new processing plant, the company trucks frozen lobster products across the country, a process that takes weeks before the customer gets the delivery. This creates different demands and expectations for inventory and payment, which in turn requires different types of bank financing, Bussone has said.
Live Lobster has buying stations in Phippsburg, Rockland, Spruce Head and Stonington. The company has employed between 80 and 90 people at its distribution facilities in Maine and Massachusetts, not including its new processing facility.
In the Gouldsboro village of Prospect Harbor, Lobster Web had employed 10 people as of last month, but during the lobster season last summer it employed 70 people full time at the plant, which operated seven days a week.
Live Lobster has received financial assistance from the government in the months leading up to its cash-flow problems.
Live Lobster received federal Community Development Block Grant funding last fall, more than a year after it first sought the town’s approval for the funding. The company received a $200,000 grant and a $200,000 loan to put toward the plant’s renovation and equipment costs. Gouldsboro selectmen had balked at endorsing Live Lobster’s grant application, which the program requires, because it was concerned about intervening in the area’s competitive lobster dealer market.
Though the company was approved last year for a separate loan from the Finance Authority of Maine, the company has not received the $750,000 it was approved for.
Officials at FAME have said that Lobster Web never completed and submitted the necessary paperwork to close on the loan and that, given the company’s situation, FAME likely would reconsider its approval if the paperwork is submitted.
Live Lobster bought the plant in Gouldsboro a year ago from Bumble Bee, which was operating it as the last remaining sardine cannery in the United States.
Bumble Bee closed the cannery and put it up for sale after company officials said federal limits on herring catches made it financially impractical to continue operating the facility.
Follow BDN reporter Bill Trotter on Twitter at @billtrotter.