Justice investigation clears mushroom group
January 16, 2005
A two-year U.S. Department of Justice Antitrust Division investigation into the Eastern Mushroom Marketing Cooperative in Wayne, PA, was completed in mid-December. EMMC Executive Director Charles Matthews said that his group has discontinued its challenged foray into the real estate business, but otherwise received a clean bill of health.
Mr. Matthews said that the cooperative was investigated "from stem to stern? on an anti-trust allegation. Cooperative e-mails and records were analyzed; membership agreements and organization policies were scrutinized.
?What we agreed to in the consent agreement was to remove deed restrictions to properties we sold in past," Mr. Matthews told The Produce News.
The real estate issue was not important to the cooperative, according to Mr. Matthews. The Justice investigation was otherwise "very positive, and it closes a chapter in EMMC history," he said. "It shows our procedures are proper and that we are a legal entity."
Even with the flawed real estate practice, "we are 99 percent above board," he said. "We put deed restrictions on property we bought, and the Department of Justice said that was illegal. They threatened to take us to court, but we promised not to do it again in the future." The insertion of deed restrictions "was an absolutely innocent last-minute insertion. We had no knowledge? of the anti-trust issues involved, "and we agreed not to do it in the future " and to remove the ones we have. It was easier to settle and move on. It was inconsequential to what we are trying to do as an organization."
The cooperative?s counsel, Bill DeStefano of Saul Ewing LLP, said that it was highly doubtful that the acquisition and subsequent sale of these properties constituted an unreasonable restraint of trade. The properties " in several instances failing or bankrupt companies " had been closed, and mushroom production had ceased before the mushroom cooperative acquired them.
The investigation "has been a serious economic drain for us," he stated. Costing hundreds of thousands of dollars, "it's been my biggest budget item for the past two years. I am absolutely excited about moving forward. This has been an absolute nightmare. I would never wish a Justice investigation on my worst enemy, but in a way it was positive, because we know our by-laws and membership are correct. There were half-a-million questions we were asked and provided answers for. We have a strong foundation to leap from now. Now that this is behind us, the EMMC can focus on the growth of the organization and reaching its original objective to increase demand and promote uses of fresh mushrooms."
The Eastern Mushroom Marketing Cooperative is a voluntary cooperative of mushroom farmers working together to grow usage and demand of fresh mushrooms. It has 60 small mushroom farms that have remained profitable through their association with the cooperative.
Mr. Matthews said that the cooperative was investigated "from stem to stern? on an anti-trust allegation. Cooperative e-mails and records were analyzed; membership agreements and organization policies were scrutinized.
?What we agreed to in the consent agreement was to remove deed restrictions to properties we sold in past," Mr. Matthews told The Produce News.
The real estate issue was not important to the cooperative, according to Mr. Matthews. The Justice investigation was otherwise "very positive, and it closes a chapter in EMMC history," he said. "It shows our procedures are proper and that we are a legal entity."
Even with the flawed real estate practice, "we are 99 percent above board," he said. "We put deed restrictions on property we bought, and the Department of Justice said that was illegal. They threatened to take us to court, but we promised not to do it again in the future." The insertion of deed restrictions "was an absolutely innocent last-minute insertion. We had no knowledge? of the anti-trust issues involved, "and we agreed not to do it in the future " and to remove the ones we have. It was easier to settle and move on. It was inconsequential to what we are trying to do as an organization."
The cooperative?s counsel, Bill DeStefano of Saul Ewing LLP, said that it was highly doubtful that the acquisition and subsequent sale of these properties constituted an unreasonable restraint of trade. The properties " in several instances failing or bankrupt companies " had been closed, and mushroom production had ceased before the mushroom cooperative acquired them.
The investigation "has been a serious economic drain for us," he stated. Costing hundreds of thousands of dollars, "it's been my biggest budget item for the past two years. I am absolutely excited about moving forward. This has been an absolute nightmare. I would never wish a Justice investigation on my worst enemy, but in a way it was positive, because we know our by-laws and membership are correct. There were half-a-million questions we were asked and provided answers for. We have a strong foundation to leap from now. Now that this is behind us, the EMMC can focus on the growth of the organization and reaching its original objective to increase demand and promote uses of fresh mushrooms."
The Eastern Mushroom Marketing Cooperative is a voluntary cooperative of mushroom farmers working together to grow usage and demand of fresh mushrooms. It has 60 small mushroom farms that have remained profitable through their association with the cooperative.
