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Market Basket dispute tied to staffing agency's bankruptcy filing

New Hampshire Union Leader

August 12. 2014 9:45PM

MANCHESTER — The lone shareholder of a Bedford staffing agency that filed for bankruptcy recently cited the leadership dispute at Market Basket for contributing to his company’s financial woes, according to court papers.

American Resource Staffing Network Inc., which filed for Chapter 11 bankruptcy on July 31, was supplying more than 1,000 workers to a variety of businesses in New Hampshire and Massachusetts in late July in various fields, “particularly the food industry,” according to an affidavit of Richard Purtell, the sole shareholder, officer and operator of both the staffing network and American Resource Network Inc., which manages the staffing agency.

“The latest blow to the Debtors is the ongoing problems with regional supermarket powerhouse Market Basket and seasonality,” Purtell said in an affidavit filed in U.S. Bankruptcy Court. “The Debtors supplied workers to the suppliers of produce for Market Basket and earned approximately $30,000 per week from that contract.

“Now that Market Basket is not purchasing the produce (and the market has also slowed with the season) and there are no workers needed by the supplier, the Debtors’ business is down (along with its profit margins), at least on a temporary basis, upon the loss of this lucrative contract,” Purtell wrote.

Purtell said the “debtors” were the staffing network and the management company. The bankruptcy filing, however, cites only the staffing network as the debtor.

Market Basket workers wanting the return of ousted CEO Arthur T. Demoulas, have triggered a widespread customer boycott in recent weeks and halted most deliveries, especially for meat and produce.

Purtell said his firm had a buyer for its business operations, but didn’t identify the buyer.

Purtell didn’t return a phone message left at his office Tuesday. His Concord attorney, Steven Notinger, wasn’t available, according to his office.

Purtell said the gross sales for the two firms totaled about $33 million a year. The staffing agency supplied 1,023 workers to other businesses at the time of its July 31 bankruptcy filing, a figure that Purtell said fluctuates weekly. The network firm had 41 employees at that time.

Court documents said the staffing agency estimated liabilities of between $10 million to $50 million and assets of between $1 million and $10 million.

Purtell said the two corporations owed the U.S. Internal Revenue Service more than $8.7 million for various employment taxes over the past decade. The IRS placed a lien on the firms’ assets.

He said the two firms’ combined debt to unsecured creditors totaled about $3 million.

Creditors holding the 20 largest unsecured claims include $367,019 owed to Bethany Commons LLC, c/o Sovereign Realty, in Londonderry and $107,000 owed to Robert Clifford of Whitefield.

On Aug. 1, bankruptcy Judge Bruce A. Harwood approved a company request to pay all wages and salaries to employees for the week of July 21. Those wages and salaries totaled more than $207,000 to more than 1,000 people, ranging from $3.69 to $1,519.98.

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