PHILADELPHIA -- A judge ruled March 13 that assets in the name of Ellis Fleisher's wife are not available for creditors of Mr. Fleisher's defunct produce houses. But the court's decision may be appealed.
Mr. Fleisher owned Ellis Fleisher Produce Co. and Dichter Bros. & Glass Inc., both in Philadelphia. Both businesses ceased operations in March 2007.
During a trial held Jan. 15 in the U.S. District Court of the Eastern District of Pennsylvania in Philadelphia, Judge Michael Baylson found that assets of Mr. Fleisher's wife, Jacqueline Fleisher, age 76, could not be claimed by Mr. Fleisher's creditors.
According to a U.S. Department of Agriculture PACA filing, "The company failed to make full payment promptly to 38 sellers of the agreed purchase prices in the amount of $1,438,415 for 507 lots of perishable agricultural commodities, which the company purchased, received, and accepted in the course of interstate or foreign commerce during the period of May 2006 through March 2007."
Mr. Fleisher told The Produce News March 24 that during the trial, it was ruled that his wife could not be held liable for his business problems. She held the couple's house in her name for a decade before the Fleisher produce houses went out of business. Mr. Fleisher said their Voorhees, NJ, home was put in her name "because of estate planning."
Mr. Fleisher also said that creditors "came after my wife, who has been sick for many years." Mr. Fleisher said that letters from psychiatrists and other documents were submitted to show that she was not a capable business person. She was removed from the company payroll "many years ago."
Attorney Steve McCarron of McCarron & Diess, a Washington, DC, firm that represents some of the creditors, told The Produce News March 25 that "there may be an appeal. There may be action to come [regarding the decision] that [Mrs. Fleisher] was not responsible under the PACA trust."
Mr. McCarron said that there is a 30-day appeal period and "there may well be an appeal. That is being actively considered. It looks likely."
Mr. Fleisher told The Produce News, "I never denied my responsibility" to creditors.
He said that the couple's only asset in Mrs. Fleisher's name was the Voorhees house. He said that six months into efforts to resolve the financial problems, the assets of the house were offered. When the creditors refused to accept the Fleisher offer, Mr. Fleisher withdrew all offers and went to trial.
"We always felt the court would find her not responsible, and I'm very pleased the court found her not responsible," he said. "The March 13 court finding said my wife had no responsibility at all. Period. All this expense [for the trial] they knew early on. They knew she wasn't involved. She was never an active part of the business."
Mr. Fleisher said that creditors "knew my wife's condition, and now they will get nothing" beyond the half-million dollars Mr. Fleisher said he has paid against the $1.4 million owed.
"The PACA was created to protect the industry from scoundrels. I was in business for 30 years, and I always tried to do the right thing," he said. Mr. Fleisher said that the Voorhees house was mortgaged to raise $325,000 to pay to creditors.
Mr. Fleisher said he and his wife now live in Puerto Rico "because it's the only place we can afford to live." He said he once owned a home there, but they no longer do.