KANSAS CITY, MO. – Three leading US poultry processors filed breach of contract lawsuits against Conklin, NY-based Maines Paper & Food Service Inc. for failing to pay for poultry products the companies delivered to the foodservice distributor. Peco Foods, Perdue Farms Inc. and Koch Meat Co. Inc. each filed separate complaints against Maines.
Peco Foods, Tuscaloosa, Ala., filed multiple complaints against Maines for breach of contract in US District Courts in Arkansas and Mississippi. The company is seeking roughly $1 million in unpaid invoices, plus interest and attorney’s fees.
Chicago-based Koch, a privately owned poultry producer and processor, said in a complaint dated May 22, 2020, that Maines failed to pay $2,571,941, plus interest, for specialty chicken products that Koch sold and delivered to Maines in March and April this year.
“For over five years, Koch has had contractual arrangements with the owners of several major restaurant chains to provide them with specialty chicken products on a regular basis,” the court document said. “During that time, Maines served as the designated distributor of Koch’s products to several of these restaurant chains. Koch’s customers would place an order for Koch’s products with Maines, which would then request those products from Koch. Upon Maines’ delivery of the products to Koch’s customers, those customers would pay Maines an amount sufficient for Maines to pay Koch in full and to pay Maines for its distribution services.”
Maines collected millions of dollars for the products, but “...stiffed Koch, hoarding the cash it collected from Koch’s customers for its own improper use,” the company said in its complaint.
Perdue Farms, Salisbury, Md., said it had a business relationship with Maines for more than 10 years. During that time, Maines purchased poultry products directly from Perdue before delivering them to Burger King or Wendy’s restaurants under the terms of Maines’ respective agreements with each restaurant, a complaint dated May 15 said.
“Unfortunately, however, Maines has failed to remit payment to Perdue in exchange for most of the poultry products delivered to Maines since late February 2020, with 29 outstanding and past-due invoices totaling $1,462,936.95 as of the date of this filing,” the complaint said.
Instead, Maines closed the portion of its business relevant to the lawsuit. However, the company has yet to notify Perdue Farms of this decision or addressed the past-due amounts or any ongoing business between the companies, the complaint said.
Novi, Mich.-based Lineage Logistics, a supplier of temperature-controlled logistics solutions, announced on May 27 that the company had acquired Maines to bolster its end-to-end supply chain solutions in the quick-service restaurant (QSR) and casual dining segments.
“Lineage acquired the last mile foodservice distribution assets of Maines, which primarily supports Burger King, Tim Hortons and Darden Restaurants,” the company said. “This division, which encompasses a sophisticated warehousing and transportation network across seven states, serves over 2,500 brand restaurants including Burger King, Tim Hortons, Olive Garden, Longhorn Steakhouse, Cheddar’s Scratch Kitchen and The Capital Grille.”
Terms of the transaction were not disclosed, and local media reports state that Lineage and Maines have declined to comment on the litigation.
“Maines has served as a key distributor of America’s foodservice community over the last century, and today’s news ensures our QSR and casual dining distribution business can continue to operate and service our customers for years to come as part of one of the best food supply chain networks in the world,” Chris Mellon, president and chief executive officer of Maines, said of the acquisition. “In Lineage, we’ve found a great partner with a stellar track record of doing business the right way and a reputation of taking care of its people, customers and communities.”