AUGUSTA — The bank whose court action forced the closing of Gardiner-based Associated Grocers of Maine in April 2011 wants to recoup at least $2.5 million of its losses from former directors and officers of that cooperative.
The Bank of Maine filed a lawsuit in Kennebec County Superior Court against Associated Grocers of Maine and 17 individuals from across the state, including some owners or former owners of grocery stores.
No defendants have responded to the lawsuit, and the court records had no indication that they had been served notice of the lawsuit.
One defendant, Craig Burgess, of Bath, a former chief executive officer and former director of AGME, said Thursday he was unaware of the lawsuit and had no comment on it.
However, he said, “We did have officers’ and directors’ insurance in place.”
The Bank of Maine went to the same court in April 2011 to get a judge’s order placing the 57-year-old cooperative in involuntary receivership.
Associated Grocers of Maine owed $6 million to the Bank of Maine and $4.8 million to Camden National Bank, among other debts, court records showed.
The cooperative’s shuttering began in earnest in late April 2011, when a judge appointed a receiver to wind up the grocery co-op because of its unpaid debt. All 141 employees of Associated Grocers of Maine lost their jobs, the products went into a fire sale, and the plant at 47 AG Drive in Gardiner went to auction and was remodeled later and reopened as a Pine State Trading Co. facility.
The closure of Associated Grocers of Maine also spawned a host of lawsuits, some by the receiver against grocery store owners who owed money for products on their shelves, some by the store owners themselves against the cooperative, and some by vendors against the receiver. Most of the cases were transferred to the Business and Consumer Docket, which is based in Cumberland County Superior Court.
The vendors’ lawsuits were settled early. The receiver’s attorney, Fred W. Bopp III of Perkins Thompson, said Thursday that almost all of the lawsuits against the grocer members have been settled.
In the latest complaint in Kennebec County Superior Court, The Bank of Maine, which is based in Gardiner, seeks “to recover damages caused by negligent misrepresentations made to the bank by AGME and the other defendants.”
The civil lawsuit says the bank loaned millions to the cooperative, which in turn gave the bank a security interest in assets of Associated Grocers of Maine, including its accounts receivable.
Those accounts receivable, however, were the subject of other lawsuits, which the bank said incurred substantial attorneys’ fees and other costs. The bank also said it had to accept payments for the contested accounts receivable “that were substantially less” than the value the defendants represented to the bank.
“In short, defendants … supplied false information for the guidance of the bank in its business transactions with AGME; failed to exercise reasonable care or competence in obtaining or communicating such information; and caused the bank to suffer pecuniary loss.”
For damages, the bank wants to recoup the cost of its attorneys’ fees in the accounts receivable litigation, and the difference between the amount the bank received in that settlement and the value of the contested accounts receivable the defendants listed as collateral.
Betty Adams — 621-5631