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April 10, 2012

Cash problems stall work at Live Lobster facility

Massachusetts-based Lobster Web Co., which last year bought the shuttered Stinson Seafood cannery in Gouldsboro, has halted lobster buying and processing while it works out cash flow problems. The facility has been stalled for more than two weeks.

Chelsea-based Live Lobster Co. bought the cannery last year and established Lobster Web to process lobsters in the Gouldsboro village of Prospect Harbor. On March 23, TD Bank froze its checking accounts for unspecified reasons, according to the Bangor Daily News. The company has not been able to pay its employees or lobster suppliers, so it ceased operations as it tries to line up alternative financing through another lender. As of last month, Lobster Web employed 10 people at the plant, and employment peaked last summer at 70. It also has as many as 90 employees at buying stations and distribution facilities in Maine and Massachusetts.

It's not the first time the company has reported cash-flow problems. Last November, checks to local fishermen bounced. Antonio Bussone, president of Live Lobster Co., said at the time that the company was working to adjust its operational procedures related to its new product line of frozen lobsters. The company previously only sold live lobsters, which reach customers in days, while frozen lobsters can take weeks to reach their destinations.

The company received a $200,000 grant and a $200,000 loan through the Community Development Block Grant program to renovate and buy equipment at the cannery. The Finance Authority of Maine also approved a $750,000 loan for the company, but that loan hasn't closed because Lobster Web never completed necessary paperwork, according to the paper.

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