Fourth Street Foods may have potential buyer
Paul Paterra/Observer-Reporter
Fourth Street Barbecue in Charleroi may have a buyer, possibly sparing the jobs of 200-plus workers, many of them immigrants.
Mark Welch, court-appointed receiver for the troubled frozen foods business, said negotiations are under way with a potential buyer.
“I’m hoping to get an agreement this week that I can take to the court,” Welch said. “If that happens we are going to put in a transitional service agreement that we’ll enter into court and hopefully close this depending on the court’s availability before year end. If that doesn’t happen, we will wind this down through November. We have been negotiating heavily with them. … My fingers are crossed.”
Welch’s role as the court-appointed receiver is to manage and sell the business and its assets. He was appointed by a federal judge at the request of attorneys representing Huntingdon National Bank, which is suing Fourth Street BBQ for millions of unpaid loans. To secure those loans, the owners of Fourth Street put the business up as collateral.
Fourth Street Barbecue initially revealed plans to close at the end of October, which would put 252 employees out of work. However, Welch said he extended the Worker Adjustment and Retaining and Notification Act (WARN) notice last week through November.
Founded in 2014, the company, also known as Fourth Street Foods, manufactures frozen food products for branded and private label retainers throughout the United States. The company has facilities in Fallowfield Township and Speers, but uses Charleroi mailing addresses.
In October, Huntingdon Bank sued Fourth Street Foods in federal court, alleging the business defaulted on an $85 million loan, plus two others totaling $4,174,002.19. The suit seeks repayment of $90 million, including accrued and unpaid interest through the resolution of the case, attorney fees and court costs.
A Chicago-based law firm also is investigating whether the business violated WARN regulations, alleging Fourth Street Foods did not give its employees adequate notice of the decision to close. The federal act requires employers to notify employees, in writing, at least 60 days before a closing or mass layoff.
Fourth Street Foods owners gave the Pennsylvania Department of Labor and Industry notice of the closure Oct. 9, according to the posting.
The business was also hit with a commercial lawsuit Oct. 27 in Washington County Court. The suit claims the company failed to pay $2.9 million for more than 1.2 million pounds of cheese products delivered between July and October.
Welch said some layoffs have occurred, but many of the workers will be brought back if the purchase goes through.
“The priorities here are to do this with a soft landing, especially with protection for the employees,” he said.
With a large immigrant work force, the closure could be devastating.
Last month, immigration attorney Joe Murphy said the Temporary Protected Status (TPS) humanitarian program for the immigrants expires in February. The program allows eligible nationals from countries in crises to live and work in the United States temporarily.
Losing their job as well as their job status would leave the immigrants vulnerable.
“This is a territorial disaster,” Murphy said at the time. “You’ve got the end of legal status and the end of the job. What are these people going to do?”
Kristin Hopkins, Charleroi Council president, said it would be beneficial to the borough and neighboring communities for Fourth Street Barbecue to remain in business.
“It’s absolutely important, especially since we’ve lost other industry,” she said. “We have a work force that’s always ready to work. Any industry that stays is always a positive. We’re hoping that something is worked out. It’s an integral part of the tax base of Speers. It’s important for the community’s ability to thrive by maintaining jobs here locally.”