Houston's Finest shuts its doors
Houston's Finest shuts its doors
After 35 years in the produce industry, John Kalil, president of Houston's Finest Produce Co. in Houston, said that shutting his doors and filing bankruptcy was the last thing he wanted to do. But that was the move he made Jan. 29.
Mr. Kalil told The Produce News that he owes the produce industry about $2 million and has assets in the neighborhood of $1.5 million to $1.6 million. He said that the filing of Perishable and Agricultural Commodities Act claims in early January "forced" him to take the severe step of filing Chapter 7, which results in the closing of the operation, rather than a Chapter 11, which allows for reorganization.
Sources representing some of the creditors said that Houston's Finest PACA Trust produce debt appears to be close to the $2 million mark with other debts pushing the total to $2.5 million or beyond.
"I think if we could have bought a little time, we could have been all right," Mr. Kalil told The Produce News Feb. 11. "Once someone files a PACA claim, the word gets out and everyone else starts to file their claims. They froze my assets so we just couldn't operate any more."
Mr. Kalil followed his father and grandfather into the Houston produce business after graduating from college in 1972. By the end of that decade, he had launched his own wholesale operation called the Kalil Fruit & Vegetable Co. He sold that to Fresh America Corp. in 1997, staying with the company for about 13 months during the transition period.
In July 2000, Mr. Kalil started another produce company that he called Kalil Fresh Marketing Inc. In 2003, he changed the name to Houston's Finest Produce Co., but it was the same operation.
"We built this company really quickly," he said. "We went from nothing to $16 [million] to $17 million in sales in seven years."
The company president did not blame the economy for his company's financial trouble, but rather he cited the inability to move enough packages through the operation at a substantial margin. "We had a lot of large chain business at cost plus, which did not cover the cost of doing business," he explained. "I had other business at a good margin but not enough of it to make us profitable."
The PACA license for Houston's Finest also includes Bryan Herr and Samuel Petro, who are listed as vice presidents of the company. The Blue Book listed Houston's Finest as being affiliated with Country Fresh Produce Inc., which is a well-known fresh-cut fruit and vegetable operation in Houston. Mr. Herr appears on the PACA license for both firms, and is president of Country Fresh. Mr. Petro is a vice president at both firms.
Mr. Kalil said that it is very important to him to take care of his customers, suppliers and employees, but he is not in charge of the liquidation of the assets of Houston's Finest. "I'm not involved. A trustee is going to decide who gets paid."
He said that he was able to find employment in the produce industry for almost all of his 55 employees.
Mr. Kalil also said that he was hoping to remain in the produce industry, as "that is the only business I know. I've had a couple of people offer me positions, and so I have to decide what I want to do."
Chapter 7 bankruptcies usually require at least a one-year suspension of license before a license holder can work again in the produce industry, and then only if a current licensee posts a bond.
Mr. Kalil told The Produce News that he owes the produce industry about $2 million and has assets in the neighborhood of $1.5 million to $1.6 million. He said that the filing of Perishable and Agricultural Commodities Act claims in early January "forced" him to take the severe step of filing Chapter 7, which results in the closing of the operation, rather than a Chapter 11, which allows for reorganization.
Sources representing some of the creditors said that Houston's Finest PACA Trust produce debt appears to be close to the $2 million mark with other debts pushing the total to $2.5 million or beyond.
"I think if we could have bought a little time, we could have been all right," Mr. Kalil told The Produce News Feb. 11. "Once someone files a PACA claim, the word gets out and everyone else starts to file their claims. They froze my assets so we just couldn't operate any more."
Mr. Kalil followed his father and grandfather into the Houston produce business after graduating from college in 1972. By the end of that decade, he had launched his own wholesale operation called the Kalil Fruit & Vegetable Co. He sold that to Fresh America Corp. in 1997, staying with the company for about 13 months during the transition period.
In July 2000, Mr. Kalil started another produce company that he called Kalil Fresh Marketing Inc. In 2003, he changed the name to Houston's Finest Produce Co., but it was the same operation.
"We built this company really quickly," he said. "We went from nothing to $16 [million] to $17 million in sales in seven years."
The company president did not blame the economy for his company's financial trouble, but rather he cited the inability to move enough packages through the operation at a substantial margin. "We had a lot of large chain business at cost plus, which did not cover the cost of doing business," he explained. "I had other business at a good margin but not enough of it to make us profitable."
The PACA license for Houston's Finest also includes Bryan Herr and Samuel Petro, who are listed as vice presidents of the company. The Blue Book listed Houston's Finest as being affiliated with Country Fresh Produce Inc., which is a well-known fresh-cut fruit and vegetable operation in Houston. Mr. Herr appears on the PACA license for both firms, and is president of Country Fresh. Mr. Petro is a vice president at both firms.
Mr. Kalil said that it is very important to him to take care of his customers, suppliers and employees, but he is not in charge of the liquidation of the assets of Houston's Finest. "I'm not involved. A trustee is going to decide who gets paid."
He said that he was able to find employment in the produce industry for almost all of his 55 employees.
Mr. Kalil also said that he was hoping to remain in the produce industry, as "that is the only business I know. I've had a couple of people offer me positions, and so I have to decide what I want to do."
Chapter 7 bankruptcies usually require at least a one-year suspension of license before a license holder can work again in the produce industry, and then only if a current licensee posts a bond.
