Long-time Philadelphia firm closes doors
Long-time Philadelphia firm closes doors
Ellis Fleisher Produce Co., long a leader on the Philadelphia Regional Produce Market, has closed its doors. As of April 24, the firm had not filed for bankruptcy protection and was working with suppliers to meet its obligations.
Another Philadelphia wholesaler who is intimately involved with the situation told The Produce News April 24, "Discovery is still going on and it's too early for anyone on this market to comment." He noted that any public discussion of the situation at the discovery stage could only make matters worse for creditors.
Industry sources said that Fleisher owes about $400,000 to its market neighbors.
Ellis Fleisher, who owns Ellis Fleisher Produce, told The Produce News, "The first distribution is set for June, and the rest depends on how long it takes to liquidate some real estate and collect some large receivables."
He continued, "There is no bankruptcy. When I decided that it was futile to go on, I called every one of my PACA creditors personally and informed them what I was doing and why. I met with Bill Morgan [of the Philadelphia market's credit group] and my accountant and made arrangements to set up a PACA fund through Louis Diess" of the Washington, DC, law firm McCarron & Diess. "Just one of the creditors jumped the gun and made things a little harder for everyone. I told each and every one of our creditors that we were liquidating certain assets and would throw this into the pot."
In a written statement to The Produce News, Mr. Fleisher added that the root of his financial difficulties stems from a fraudulent act committed by a former employee. "In September of 2000, we found that an employee who had been on the job for about eight years was responsible for losses of approximately $1 million," he wrote.
Mr. Fleisher said that he did not learn of the problem until "a clerical employee whose job was inventory control" had covered up the fraud. That woman left the firm for maternity leave in August 2000. "Shortly after that, Sandy Matzinger took over the inventory and discovered the problem. We then hired a private investigator who sent undercover agents in and caught the employee, whose name is Donald Byard."
Mr. Byard signed a confession, "and the case was turned over to the district attorney and then he was tried, convicted and sentenced to 26 months in prison."
"As far as the other people that Byard named, one was a hauler and the other one worked for a broker on the market," Mr. Fleisher continued in his statement. Mr. Byard had taken weekly amounts from the two parties. "I didn't push this because it would have been too much of an embarrassment for the broker involved."
Mr. Fleisher continued: "For insurance purposes, we had to make a claim on how much we could verify what was taken. Over a period of about 18 months, we were able to verify $228,000 in missing inventory. We were only insured for $100,000. Later that year, due to the stress, I ruptured a valve in my heart and early the next year I had to have open-heart surgery.
"We estimate that because we found $228,000 in such a short period of time that, given the employee was on the job for about eight years, it probably took him a few years to get things organized. It is probably in the neighborhood of a million dollars plus what personal money I had to put in to shore things up until I ran out personally."
Sixty-seven year old Mr. Fleisher continued in his statement: "My cardiologist warned me that if I didn't let up on the stress, I would not see my 70th birthday. I made the decision to go out of business as it was becoming impossible to keep up the fight and live.
"I am presently liquidating assets and working with creditor attorneys to get as much as we can for them," her added.
"I have been in business over 30 years and have always tried to conduct myself with honesty and integrity. Unfortunately things don't always work out the way we hope they will. This has been the most difficult period of my life."
Another Philadelphia wholesaler who is intimately involved with the situation told The Produce News April 24, "Discovery is still going on and it's too early for anyone on this market to comment." He noted that any public discussion of the situation at the discovery stage could only make matters worse for creditors.
Industry sources said that Fleisher owes about $400,000 to its market neighbors.
Ellis Fleisher, who owns Ellis Fleisher Produce, told The Produce News, "The first distribution is set for June, and the rest depends on how long it takes to liquidate some real estate and collect some large receivables."
He continued, "There is no bankruptcy. When I decided that it was futile to go on, I called every one of my PACA creditors personally and informed them what I was doing and why. I met with Bill Morgan [of the Philadelphia market's credit group] and my accountant and made arrangements to set up a PACA fund through Louis Diess" of the Washington, DC, law firm McCarron & Diess. "Just one of the creditors jumped the gun and made things a little harder for everyone. I told each and every one of our creditors that we were liquidating certain assets and would throw this into the pot."
In a written statement to The Produce News, Mr. Fleisher added that the root of his financial difficulties stems from a fraudulent act committed by a former employee. "In September of 2000, we found that an employee who had been on the job for about eight years was responsible for losses of approximately $1 million," he wrote.
Mr. Fleisher said that he did not learn of the problem until "a clerical employee whose job was inventory control" had covered up the fraud. That woman left the firm for maternity leave in August 2000. "Shortly after that, Sandy Matzinger took over the inventory and discovered the problem. We then hired a private investigator who sent undercover agents in and caught the employee, whose name is Donald Byard."
Mr. Byard signed a confession, "and the case was turned over to the district attorney and then he was tried, convicted and sentenced to 26 months in prison."
"As far as the other people that Byard named, one was a hauler and the other one worked for a broker on the market," Mr. Fleisher continued in his statement. Mr. Byard had taken weekly amounts from the two parties. "I didn't push this because it would have been too much of an embarrassment for the broker involved."
Mr. Fleisher continued: "For insurance purposes, we had to make a claim on how much we could verify what was taken. Over a period of about 18 months, we were able to verify $228,000 in missing inventory. We were only insured for $100,000. Later that year, due to the stress, I ruptured a valve in my heart and early the next year I had to have open-heart surgery.
"We estimate that because we found $228,000 in such a short period of time that, given the employee was on the job for about eight years, it probably took him a few years to get things organized. It is probably in the neighborhood of a million dollars plus what personal money I had to put in to shore things up until I ran out personally."
Sixty-seven year old Mr. Fleisher continued in his statement: "My cardiologist warned me that if I didn't let up on the stress, I would not see my 70th birthday. I made the decision to go out of business as it was becoming impossible to keep up the fight and live.
"I am presently liquidating assets and working with creditor attorneys to get as much as we can for them," her added.
"I have been in business over 30 years and have always tried to conduct myself with honesty and integrity. Unfortunately things don't always work out the way we hope they will. This has been the most difficult period of my life."
