A federal judge has ordered the former owners of a wholesale lobster business and the Trenton Bridge Lobster Pound to set aside $1.43 million, which is the amount a lobstermen’s group is expected to be awarded in its lawsuit against members of the Pettegrow family.
The Maine Lobstering Union in December sued the former CEO of its wholesale business and his parents in U.S. District Court in Bangor, alleging that the family defrauded and stole from the group after selling it their wholesale lobster business three years ago.
U.S. District Judge Lance Walker accepted an estimate of the amount of money lost as $1,438,181.23. That figure was provided by certified public accountants in Portland hired by the lobstermen’s co-operative, according to court documents.
Warren Pettegrow, who was fired in April 2019 as the CEO of the co-op’s retail and wholesale business, Lobster 207, and his parents, Trenton Bridge Lobster Pound owners Anthony and Josette Pettegrow, are accused of violating the federal Racketeer Influenced and Corrupt Organizations Act. The Maine Lobstering Union, which purchased the Pettegrows’ wholesale business in 2017 for $4 million, alleges that, after the sale, the Pettegrows embezzled funds, submitted fraudulent invoices, “up-charged” for lobster products, and violated the sale contract by operating a competing wholesale business.
The Ellsworth attorney representing the Pettegrows and the iconic lobster pound said Thursday that even if the attachment turns into a judgment at the end of the case, the business would survive financially. Jason Barrett also said that Walker reduced the requested attachment from $2.6 million to $1.43 million.
“This is a complex case involving 16 or so complicated contracts with some unusual terms that will be key to the case,” he said. “These early decisions trim the lawsuit back enormously and provide the Pettegrows strong momentum as they move toward a trial. At trial, they are confident the truth will come out and show them to be hardworking people who honored their obligations and contracts.
“The Pettegrows have always been friends of the lobstermen and lobster industry and it is very regrettable that the allegations were made at all,” the lawyer said. “They are glad the judge has started to set this right.”
Thimi Mina, the Portland attorney representing the co-operative, said Thursday that the organization’s members were “relieved” by the judge’s decision.
“It gives them some financial security going forward,” he said. “They are looking forward to proving this case.”
Warren Pettegrow ran his parents’ wholesale business prior to its sale in March 2017 to the Maine Lobstering Union. At the time of the sale, the group hired him to run its wholesale operation.
Also named as a defendant in the lawsuit is Stephen Peabody, an Addison resident who is manager of the Beals-Jonesport Co-op and is described in the complaint as a “longtime business associate” of the Pettegrows. Walker did not include him in the attachment order because the judge is not convinced the group will prevail in proving the allegations against him.
The Maine Lobstering Union was founded as a co-operative in 2013, following a sharp drop in the price paid to fishermen for their catch, as a way to give members a greater financial stake in the wholesale distribution of lobster.
Though technically not a union, as its members all are self-employed, the co-operative is affiliated with the International Association of Machinists and Aerospace Workers union which, as a labor organization, is protected from alleged racketeering under the federal RICO statute.