Facing “too many legacy issues,” National Fish and Seafood closes
National Fish and Seafood announced that it was immediately ceasing operations on Friday, 10 May, marking the end of its long history in the seafood business and putting 150 employees out of work.
Founded in 1979, the Gloucester, Massachusetts, U.S.A.-based seafood processor, which sells the Matlaw’s stuffed clam line, had been reeling financially since owner Pacific Andes filed for bankruptcy in 2016. NFS put itself up for sale, and several companies – including Red Chamber – considered purchasing it, but ultimately never did.
“Unfortunately, despite great strides we made in improving operating performance, National Fish just had too many legacy issues that prevented us from consummating a sale,” NFS President Todd Provost said in a press release.
In January 2019, NFS demanded payment from Pacific Andes, which owes NFS USD 30 million (EUR 28 million), according to court documents. Plus, NFS was paying out legal fees for its trade secrets lawsuit against Tampa Bay Fisheries for the latter half of 2018 and early 2019, before both suppliers agreed to settle the case in mid-March. And former NFS President Jack Ventola was convicted of fraudently diverting money from the company and then not paying taxes on the income.
Provost did not return emails from SeafoodSource requesting comment on the closure or the company’s financial situation.
City and state government entities have said they will seek to help NFS’ displaced employees.
“The news was not only a surprise to me, but also very upsetting as it leaves many employees uncertain of what to do next,” said Gloucester Mayor Sefatia Romeo Theken in a statement emailed to SeafoodSource.
The City of Gloucester, the Massachusetts Governor’s Office, State Senator Bruce Tarr, and State Representative Ann-Margaret Ferrante have mobilized a Rapid Response team through the Massachusetts Office of Business Development (MOBD) to help the affected employees, Romeo Theken said.
“I am committed to helping the displaced employees, as they are our neighbors, friends and family. We will continue to follow the situation and provide information as it is available,” she said.
The Rapid Response services include information and assistance on unemployment insurance, workshops that prepare employees for new jobs, resume assistance, connections, and referrals to MassHire Career Centers.
NFS’s financial troubles in part stemmed from majority owner Pacific Andes’ debt. The Hong Kong-based supplier sometimes required NFS to pay U.S. brokers in connection with seafood-related financial transactions the parent company made within the United States, according to court documents filed in Pacific Andes’ bankruptcy case.
The money owed reached a high of more than USD 42.9 million (EUR 38 million) by September 2015, though Pacific Andes repaid more than USD 10.6 million (EUR 9.4 million) that year.
While Pacific Andes allowed NFS to purchase more than USD 3 million (EUR 2.7 million) in seafood from its affiliates using the loan balance, there was a remaining balance of more than USD 30.1 million (EUR 27 million).
Ventola is in the midst of a two-year sentence after being convicted in April 2018 of fraudulently diverting USD 2.9 million (EUR 2.6 million) from NFS between 2006 to 2013, and failing to pay taxes on that money. In his guilty plea in the case, Ventola acknowledged conspiring with NFS Senior Sales Executive Richard J. Pandolfo, Head of Operations James Corbett, and company accountant and board member Michael Bruno to defraud the U.S. Internal Revenue Service and Pacific Andes.
At his sentencing, Ventola – who remained a minority owned of the company – unsuccessfully pressed for probation instead of a jail term, arguing that the company could collapse without his leadership.
“The alternative sentence of incarceration, depriving NFS of Mr. Ventola’s day-to-day leadership, would likely cause the demise of NFS,” Ventola’s attorney, Derrelle M. Janey, wrote in a statement submitted to the judge in charge of sentencing Ventola. “This view is held not only by employees, but by the majority shareholder, Pacific Andes International Holdings.”
In its own letter to the court pleading for Ventola’s continued ability to work for the company, Jessie Ng, managing director and executive director of Pacific Andes, said Ventola “singularly possesses the experience, knowledge, and employee leadership required for NFS’ survival,”
“Jack’s continued employment as a senior executive of National Fish is, in my opinion, essential to our efforts to turn that company around,” Ng wrote. “Furthermore, without Jack’s presence at such a critical juncture, I am deeply concerned about the future of National Fish. The very livelihood of the many employees at National Fish is dependent on the future of National Fish being secured.”