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Grocery supplier's debt totals more than $10 million

Camden National Bank holds $4.8 million second mortgage on company’s property

By Betty Adams badams@centralmaine.com
Staff Writer

AUGUSTA -- Associated Grocers of Maine accumulated at least $10.8 million in debt thanks to "irreversible, market-driven" losses on its way to court-ordered receivership.

The $6 million owed Savings Bank of Maine is only part of the reason the grocery distribution cooperative is being prepped for shutdown. Records at the Kennebec County Registry of Deeds show Camden National Bank holds a $4.8 million second mortgage on the real estate and other personal property at the Gardiner-based distributor.

The mortgage documents are dated September 2010. Diane Norton, vice president of marketing and communications at Camden National Bank, declined comment Thursday, citing client confidentiality.

The court-appointed receiver, James C. Ebbert, issued a statement Thursday on Associated Grocers of Maine's website, www.agofme.com, noting the company had suffered "irreversible, market-driven losses" in recent years.

"Despite the best efforts of management and AGM's dedicated employees, the continued loss of customers coupled with struggling same-store sales resulted in a significant operating loss for the fiscal year that ended on March 25," Ebbert said in the statement.

Ebbert urged customers -- mostly small, independent grocery stores -- to immediately seek alternative suppliers. For example, the company was to cease delivering cigarettes and tobacco Thursday; he suggested Augusta-based Pine State Trading Co. as an option.

In the meantime, plans are being made to assist the 100-plus workers who stand to lose their jobs as a result of the company closure.

The Maine Department of Labor's Rapid Response Team will offer an informational session today for displaced workers at the Augusta State Armory, Western Avenue, from 10 a.m. to noon. This is in addition to a session already scheduled for 10 a.m. Saturday at the Augusta Civic Center for some 70 employees belonging to the Teamsters union.

At today's meeting, workers will get information on unemployment benefits, CareerCenter employment and training services, and health care options.

Adam Fisher, a spokesman for the Maine Department of Labor, said the department has been assured by Associated Grocers of Maine representatives that workers will be paid what they're owed.

If there are problems, workers should contact the department, he said.

Shelley Doak, executive director of the Maine Grocers Association, a 75-year-old membership business trade association, said many of her group's members are saddened by the news of the closure.

"First and foremost, our heart goes out to Associated Grocers of Maine, which spent 57 years supplying independently owned and operated grocery stores all over state of Maine.

"The grocers I've spoken with are saddened, shocked, dismayed and concerned," she said. "They're scrambling to work with other wholesalers to make sure they keep their shelves fully stocked for their customers."

Doak said she had already learned of one grocer aiding another.

"A larger independent grocer supplied by another company is providing stock to a smaller store just on an interim basis," Doak said. "It's an example of Maine resourcefulness. We help out our neighbors."

Doak noted that Associated Grocers of Maine were "champions of independent grocers" and held a seat on the Maine Grocers Association board.

The state is also formulating plans to aid the store owners who depended on the distributor for supplies.

"We're working on it," said Adrienne Bennett, press secretary for Gov. Paul LePage.

Betty Adams -- 621-5631

badams@centralmaine.com