Live Lobster checking accounts frozen

Adrick Roscoe of Live Lobster Co. works on the Rockland Municipal Fish Pier in August 2010 where he buys lobster from fishermen and sells them bait.
Adrick Roscoe of Live Lobster Co. works on the Rockland Municipal Fish Pier in August 2010 where he buys lobster from fishermen and sells them bait. Buy Photo
Posted March 26, 2012, at 7:51 p.m.
Last modified March 28, 2012, at 4:38 p.m.
Antonio Bussone
Antonio Bussone

ELLSWORTH, Maine — A Massachusetts-based lobster company has run into another problem with its checks, but this time it is a bank that is to blame, according to a company official.

Lobster Web Co. LLC, owned and operated by Live Lobster of Chelsea, Mass., found out Friday afternoon that TD Bank has frozen its checking accounts, Lobster Web Vice President Toni Lilienthal said late Monday afternoon. She said the bank had not placed restrictions on Lobster Web’s other financial assets.

Lilienthal, who is based in Jonesport, said the company had enough money in its account to cover all the checks it was issuing late last week to employees and fishermen. She said the company has not been operating since Friday because it doesn’t want to issue checks that the bank will not process.

“That’s what we’re trying to figure out,” Lilienthal said Monday when asked why Lobster Web’s checking system had been frozen. “We’re not taking in lobsters right now because the checks aren’t going through. The money is in the account.”

Last November, Lobster Web bounced multiple checks that were written out to fishermen at various locations along the Maine coast. The latest problem affects all the company’s operations, Lilienthal said.

Last fall, company President Antonio Bussone said 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.

Attempts Monday to contact Bussone and other Live Lobster officials in Chelsea were unsuccessful.

A spokesperson with TD Bank declined Monday in an email to comment on the situation “in the interest of customer privacy.”

A message left late Monday afternoon for Live Lobster’s attorney, John Sullivan of Concord, N.H., was not returned.

Lilienthal said Live Lobster has been trying to arrange alternate financing through a different lender. She said Live Lobster officials were meeting with bankers Monday afternoon to clear up the situation.

“They’re in meetings right now,” she said. “You can’t be too careful after what happened in November.”

Live Lobster has buying stations in Phippsburg, Rockland, Spruce Head and Stonington. The company employs 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 currently employs 10 people, 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 state and federal agencies 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. Dana Rice, chairman of Gouldsboro’s Board of Selectmen and a lobster dealer, abstained from voting on the measure because of his competitive relationship with Live Lobster.

Last year Live Lobster was approved for a $750,000 loan from the Finance Authority of Maine to help fund renovations at the former sardine cannery. Live Lobster officials say the company never received that loan.

Live Lobster bought the plant 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 (@billtrotter) on Twitter.

CORRECTION:

An earlier version of this story contained inaccurate information about a loan from the Finance Authority of Maine to Live Lobster of Chelsea, Mass. Live Lobster was approved last year for a $750,000 loan from FAME but never received the loan, according to Live Lobster officials.

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