GOULDSBORO, Maine — Though the company has been inactive for several months, Live Lobster’s presence in Maine seems poised to officially come to an end in about a month.
That’s when lender-ordered auctions will be held to find new buyers for three Live Lobster waterfront properties in Gouldsboro, Phippsburg and Stonington.
The properties are listed on the website of Tranzon LLC, a nationwide real estate auction company. Auctions for Live Lobster properties in Gouldsboro and Stonington will be held Wednesday, Sept. 26, and another auction for the company’s former buying station in Phippsburg will be held Thursday, Sept. 27, according to information posted on the auction firm’s website.
No one answered the phone at Live Lobster’s main office in Chelsea, Mass., when a call seeking comment was placed early Wednesday afternoon. Multiple attempts to contact Live Lobster officials in recent months have been unsuccessful.
This past April, Live Lobster’s primary lender, TD Bank, filed suit against the lobster distributor, claiming the firm violated terms of a 2008 loan agreement for $4 million from the bank.
According to federal court documents posted online, TD Bank voluntarily dismissed the lawsuit against Live Lobster last month. Attempts late Wednesday to contact the bank’s attorney for comment about the lawsuit’s dismissal were unsuccessful.
The lawsuit, and another filed against Live Lobster by a former company official and minority owner, are believed to be the primary reason Live Lobster suspended its operations in late March, when its checking accounts were frozen by TD Bank.
In its lawsuit, TD Bank claimed it loaned $4 million to Live Lobster in June 2008. As part of that loan agreement, Live Lobster promised the bank that it would have a “first-priority security interest in substantially all of its business assets … including without limitation, its inventory and accounts and the proceeds thereof,” according to the complaint.
TD Bank accused Live Lobster of failing to make loan payments and of depositing some of its proceeds with another bank, Century Bank and Trust Co. of Medford, Mass., which TD Bank claimed was a violation of the security agreement. TD Bank also claimed that Live Lobster still owed TD Bank $3,403,811.26 in principal and $4,413.93 in interest.
Alan Brown, Live Lobster’s former general manager, sued the company in February for allegedly failing to pay money it had promised him to resolve an earlier lawsuit he filed against the firm two years ago. Brown claims in his suit that he still is owed $235,702, plus interest, legal fees and other costs, of the $460,702 that the company promised to pay him after he sued them in 2010 for breach of contract and fiduciary duty. That case is still pending.
Late last year, Live Lobster drew the ire of lobstermen up and down the coast when it bounced checks it wrote as payment for their lobster.
At the time, Live Lobster President Antonio Bussone said “not that many” checks bounced and the company was having to adjust to new payment schedules associated with its new processing operations in Gouldsboro. Bussone said last December that the company had made good on the bounced checks and ironed out its cash flow problems with the bank.
Since this spring, company officials have kept mum about its financial situation, aside from blaming TD Bank for freezing its checking accounts.
Live Lobster, which has operated in Maine as Lobster Web Co., had buying stations in Phippsburg, Rockland, Spruce Head and Stonington. The buying stations in Rockland and Spruce Head did not involve any real estate, according to a person familiar with the firm’s operations in the state who did not want to be identified. The company’s operations in Rockland and Spruce Head consisted simply of Live Lobster-owned boats that tied up to local piers and bought lobster from local fishermen.
Live Lobster employed between 80 and 90 people at its distribution facilities in Maine and Massachusetts, not including its lobster processing facility in the Gouldsboro village of Prospect Harbor, which it purchased last year from Bumble Bee Foods.
Last summer, Live Lobster employed 70 people at the Gouldsboro plant, which operated seven days a week. The company, which had solely been a distributor until it bought the facility, spent months renovating the facility from a sardine cannery to a lobster processing plant.
The plant, located in the Gouldsboro village of Prospect Harbor, had operated as a sardine cannery from 1906 until two years ago, when Bumble Bee decided to close the facility and to shift its production to other canneries in New Brunswick, Canada. At the time of its closure in April 2010, the plant employed 128 people and was the last remaining sardine cannery in the United States.
Many in Gouldsboro and the surrounding communities put their hopes for keeping the plant functioning in Live Lobster. The company 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 $400,000 in CDBG funds 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. The company also was approved last year for a separate loan from the Finance Authority of Maine, but the company did not receive the $750,000 it was approved for. Officials at FAME have said that Live Lobster never completed and submitted the necessary paperwork to close on the loan.
Yvonne Wilkinson, Gouldsboro’s town manager, said Wednesday that the plant has played an important role in the area economy and many people are hopeful that it can again. A viable lobster processing facility not only would employ local people but would help diversify Maine’s lobster industry, which pumps hundreds of millions of dollars each year into the statewide economy.
“We’d love to see that,” Wilkinson said. “We just hope for the best.”
Follow BDN reporter Bill Trotter on Twitter at @billtrotter.
This summer’s prices may have put them out of business anyway.
Reminds me of seeing a midwest farmer watch all his equipment being auctioned off by the bank. All the work put in and all the workers jobs… Gone!
I guess all the infrastructure and education, et al. “built” by the government didn’t work this time. Some may take credit when it works, but no one will take credit when it fails.
If the Prospect Harbor facility had stayed open, summer prices might have been different. If LiveLobster had stayed open, when the Canadian processors would not take shedders from Maine this summer, LiveLobster could have processed 1 million pounds. It was no longer in business. Should this result be credited solely to the company or to the adversaries who worked to put the company out of business?
Not knowing the lobster business or even what a shedder is (I’ve asked before with no response so I’ll assume it’s a soft shell), then the place wasn’t run right; it was a perfect storm of events that brought it down; they should have had the name Solyndra so the entity that ‘built that’ would’ve helped them. Result ? lost jobs….
Obviously Bush’s fault……….
Actually, we can thank John E Baldacci for helping a dem. insider.
Thanks for the chuckle this afternoon….
There’s a shock….NOT
Its all about location. Gouldsboro is not the location. Belfast would have been an excellent location if the building had not been destroyed.
I wish the best of luck to the young fellow on MDI that is working at starting a similar facility. At the least he seems better set up for knowledge and research for what is needed.
They were processing lobster not eating them! Your comment makes no sense. Fact is Bussone is a crook!
Actually he isn’t. He is an honorable man. Many people did not want him to succeed because he had a business model which would have shifted power in ways that made people uncomfortable. He was disrupting what one local leader called “the human ecology.” Of course the problem with that ecology is that it creates a lobster industry where most of the profits do not stay in Maine.
I made no remark about consumption. Your not interpreting what I posted.
The comment I made was that the location for the industry would have had higher overhead (cost) than if he had chosen one further south nearer a better transportation hub.
The Stinson plant is quite removed from highways. Thus if a competing operation was opened say in Belfast, their cost of transportation would be much lower.
To make a business like that viable. Using their plan that they used in Mass. They need to be near a airport and major highways. The Stinson plant has none of those. It was destined to fail.
I was responding to “alt20.” I agree that a better infrastructure in downeast Maine is key in the long term for any value-added business in Hancock and Washington Counties. I think the advantage the Prospect Harbor provided was an excellent facility and a superb and dedicated workforce. Also economic development for downeast Maine. A worthy if risky goal. During the time LiveLobster operated in Gouldsboro, it added well over $1 million to the local economy.
In the end it cost LiveLobster almost everything. They invested every cent they had in trying to make the venture work. Perhaps the risk was too high? Perhaps some of us in Maine made the risk higher than it needed to be?
They need to just knock that weird, big guy down and forget about the whole thing.
And just get some free Obama money instead of trying to put a business there.Duh.
This whole story, from the beginning, has just been more evidence that factory jobs are gone in Maine. Those folks who still work in the few that exist (paper mills) would be wise to start planning an exit strategy. With some training, anybody can pick lobster meat or run a paper machine. And in developing countries, they can do it for a whole lot less. That’s not going to change.
Atlantic Canada where they process so much of the Maine lobster harvest is not a developing country.
It might be useful to ask: what was LiveLobster trying to achieve and why did it fail? All the innuendos aside, all the repetitions in this story of previous stories involves remarkably superficial reporting. Who had an interest in LiveLobster failing and how did they contribute to the result?
A little due diligence on the part of Maine State Officials would have immediately discovered that Lobster Web had no corporate capacity at all because of the Browne lawsuit and all the heartache , dashed hopes and actual losses Maine fisherman have suffered could have been spared. This was on Baldacci’s watch, by the way, and was widely touted as a save ( via new product) for Maine’s last cannery and its jobs.
Here is a good history on how lal this started from Working Waterfront http://www.workingwaterfront.com/articles/Industry-insider-to-purchase-Prospect-Harbor-plant/13994/
Sure we need lobster processing in Maine, right in Maine communities but it would have taken no time at all to find out Bussone did not have the corporate capability to do what Lilenthal was selling the Governor . All the document son the lawsuit were publicly available at the time all this was getting started and the implications were very very clear.
State policy on jobs and economic development should look first to Mainers and Maine communities when loans and grants are available to build added value by Mainers from within Maine communities.
Lindsay Newland Bowker
Stonington, Maine