Z&S Fresh liquidating assets to pay creditors
by Tim Linden | June 09, 2009
Z&S Fresh Inc., with offices in Fresno, CA, and Nogales, AZ, has ceased its operations as a shipper and is attempting to collect its accounts receivables and sell assets to pay more than $4.6 million in debts to potential PACA creditors.
Lawsuits were filed by several PACA creditors in the past several weeks, which ultimately forced the company to cease operations. Bart Botta, an attorney with Rynn & Janowsky in Newport Beach, CA, filed for a temporary restraining order on behalf of several clients to freeze the firm's assets in late May. He said that another attorney did the same thing. While there was a hearing scheduled for Friday, June 12, for a preliminary injunction order, Mr. Botta said that Z&S and its sole owner, Martin Zaninovich, had already stopped selling product and were fully cooperating with the efforts to pay off the PACA Trust creditors.
Mr. Zaninovich invited a number of his creditors, including Mr. Botta and his clients, to a meeting in Fresno Thursday, June 4. At the meeting, the Z&S owner laid out what Mr. Botta called a "reasonable plan" to collect his accounts receivables and sell assets to meet his debt obligations.
Mr. Botta said that at the meeting, Z&S confirmed that it has about $4.6 million in debts to PACA creditors, in which it included its debts to growers. It is possible, Mr. Botta said, that some of those growers as non-PACA licensees would not qualify as PACA Trust creditors unless they follow specific procedures to collect the debts they are owed.
Almost all PACA licensees include the appropriate language on their invoices, which gives them PACA Trust protection. Non-licensees must take additional steps to secure their position, and Mr. Botta said that it was not known if all the growers followed those procedures.
At the meeting Mr. Zaninovich indicated that he had $3.3 million in accounts receivables as well as a multi-million dollar, state-of-the-art packing and cooling facility that would be sold to raise additional funds. Complicating the issue was the salability of that shed. While it is said to be a modern facility that cost as much as $11 million to build, it was noted during the meeting that there are more than 10 fruit-cooling facilities for sale in the San Joaquin Valley. Z&S apparently has a mortgage of $4.8 million on its facility.
Phone calls to Mr. Zaninovich and a spokesperson for the company were not returned by The Produce News' press time for this article.