Market basket turmoil pushes NH recruiting company out of business

Supermarket chain battle is ‘final blow’ for Bedford-based American Resource Staffing

The Market Basket supermarket dispute helped force a financially troubled Bedford-based recruitment agency to the brink of bankruptcy, according to a filing in the US Bankruptcy Court in Manchester.

American Resource Staffing Network Inc., which now manages a payroll of more than 1,000 people, and the associated American Resource Network both filed for Chapter 11 bankruptcy in late July, claiming at least $10 million. dollars of debt.

ARSN supplies workers primarily to the food industry in Massachusetts and New Hampshire and filed an emergency petition to pay those workers, which was granted Aug. 1.

The list of names attached to the filing indicates that on July 25, the company was to pay the workers less than $500 each, totaling $287,000 for the week. American Resources Network directly employs 41 people.

The company has been struggling financially for some time, due to a “vicious cycle of increasing employment tax liabilities, both state and federal, and an inability to keep up with the times.” outstanding obligations,” Richard Purtell, the sole shareholder and CEO of both companies, explained in an affidavit filed with the court.

Purtell said the companies owe the IRS a total of $8.8 million — a debt that has accumulated over more than a decade.

The filing also says ARSN owes the State of Massachusetts $1.9 million, including $1.2 million owed to the Massachusetts Department of Revenue and $628,000 in unemployment compensation taxes.

It also lists the New Hampshire Wage and Hour Division as a creditor, but the filing does not specify the amount owed. In total, ARSN owes $3 million to its unsecured creditors.

An unannounced Massachusetts sweep of the company’s bank accounts “to the tune of several hundred thousand dollars”, led the company to “scrambling to make its current weekly payroll” and increased its tax liability even further, Purtell said.

But ongoing issues with Market Basket were the “final blow”, Purtell said.

ARSN provided workers to companies that supply products to what Purtell described as the “supermarket powerhouse”. ARSN was making $30,000 a week from that contract, the company said, but the firing of Market Basket CEO Arthur T. Demoulas and the subsequent employee and management revolt put an end to sales. providers.

Add in a seasonal downturn, and the company could not continue to operate and continue to pay down debt, Purtell said. Without bankruptcy protection, the company would have to close its doors and would not be able to pay the workers what is already owed to them.

The good news, Purtell said, is that ARSN has a buyer and enough money to keep operating and even repay creditors once business picks up in the fall.

He has $2.2 million in cash, with expenses of $2 million, for August, which means that by the end of the month he should have $264,000 in cash, dropping to $356,000 at the end of September.

The ARSN – and its bankruptcy attorney, Steven Notinger – did not return the appeals by the NHBR deadline.

About Marc Womack

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