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.
I hope things get straightened out soon…the area needs the work, people need the jobs.
This money stuff ain’t rocket science, but you gotta know what you’re doin!
With lots of dollars flying around in many places, it’s easy to plan badly and sometimes it’s just better to get somebody with a finance degree from the big university!
Someone is in hot water.
Even if this writer isn’t knuckling down and clawing for facts, if one put their feelers out this tale may have legs.
Option 1: Crusher Claw
Option 2: Pincher Claw
I see what you did there.
This is really not all that different from the Verizon-Fairpoint deal that Baldacci allowed to go through. Baldacci wanted Live Lobster to run this operation and did everything he could to get it going. The thing is that anyone in the lobster industry could have told the governor that Live Lobster is a shady outfit and another buyer should have been considered.
Thanks for shedding some light on this shell game.
Maybe there will be an update tamale.
It is a sinking ship, and the captain feels he can make port with enough speed. Alas the engines quit and the captain thinks he can still make it on momentum.
The company has recognized this is a losing venture and has stopped the cashflow before it sunk the company. The company has stopped the engine.
Presumably Baldacci got his “loan finder’s fee” in cash.
You know, I as a reader was able to research this company and owner from here. I saw his checkered past. I posted articles from Mass. papers. Baldacci didn’t…or did he?
How could he not have. There was concerns on this from the get go. Another company looked at the property and determined they could build a new plant for less than it would cost to refurbish this one. Then Baldacci´s team is in town pushing hard for the Gouldsboro Selectmen to get on board with Bussone coming to town. Do you think Baldacci didnt know that letting Fairpoint take over landline business in Maine from Verizon wouldnt turn out to be a bad idea?
You and I have the same search engine///
The Gouldsboro selectmen were right to be cautious on this in the first place. These guys were just like the garbage guys and the windmill guys and the paper mill guys – looking for free money from taxpayers so they could later (not much later, at that) walk away and say, “Oops! Just couldn’t make enough profits so we’re leaving.”
These scams will keep happening so long as there’s taxpayers’ money being given to private enterprises which, if they’re “private,” should pay their own way, since they’d be getting all the profits.
No more taxpayers handouts – corporate welfare – to big, “we promise lots of jobs” outfits – – only to small, local businesses providing services we know we need and/or want.
Absolutely! They were having problems in Stonington and Rockland 2 yrs before making payroll. Doesn’t anyone do a little internet research …..
Anyone in the industry or with ties to it could have told Governor Baldacci and his team that Bussone and Live Lobster were not people to be going into business with.
Maybe he is cleaning drug money?
dirty laundry on the line
http://pacer.mad.uscourts.gov/dc/cgi-bin/recentops.pl?filename=gorton/pdf/brown%20v%20%20bussone%20motion%20to%20clarify%20pi%20mo.pdf
yup, just like a half dozen “lost lobster LLC’s” in Maine ……”You can’t get there from here”
Odd that he borrowed 750,000 from TD North to buy the place. and got a CDBG grant for the same amount.
What’s odd about that? Small businesses do it all the time. You borrow, apply for grants, try to drum up investors; start up is expensive.
Or you might tell 2 separate entities that you need 750,000 dollars to make the deal without telling the other about it. Most new businesses fail, I think 80% of start-ups are gone after 5 years, and maybe this guy will pull a rabbit out of his hat, but he seems to have written a lot of bad checks before, and he might bring a lot of other people down with him this time. He didn’t understand the cash-flow of the business which seems like a pretty basic thing.
but didn’t complete the FAME documents……for a $750 loan that was already approved? Maybe they lost track of their lies or thought $750k from TD North was good enough of a “haul”.
I don’t know what this guy did or did not do. But, I do know that banks can make…ahem…mistakes which put people in a serious catch 22 situtation.
The only mistake here is that Baldacci got behind this guy from the get go without taking into account that his business record in Massachusetts is horrible based on everything from vendor payments to worker safety and enviromental violations. His money has been froozen before by TD Bank in Massachusetts, that time in regards to a federal lawsuit.
His bouncing checks around here four or five months ago was a sign that then end was on the way.
Lobster processing in Maine is not a money making business. It’s cost effective to send the critters to Canada and have them process them. They have production plants the size of small towns. Ask Linda Bean in Rockland if she’s processing lobster anymore. Word’s out she’s shipping to Canada.
Those cook trucks from Canada are something else.
Let’s stop fooling around…this guy is broke and the bank knows it…his while scheme was based on grants, grants, and more grants. Kick the bum out.
And his no less than 19 different LLCs. Rob from LLC 4 to pay LLC 14 and then take the revenue from LLC 12 to pay LLC 11 and the funny money train goes around the track but never stops at the station.