Salyer American Fresh Foods, which effectively closed its doors in May, is continuing its bid to have its court-appointed receiver Steve Franson removed from his position after contending that his moves to lay-off 1,000-1,200 employees and shut down the group went beyond his appointed duties.
The group has argued before Superior Court Judge Robert O'Farrell that Mr Franson failed to give workers reasonable notice before laying them off under state and federal laws, and also levelled allegations about a bank withdrawal of US$2.9m from company accounts without the receiver's authorisation.
Salyer also claimed that Mr Franson had failed to provide health insurance premiums, had wrongfully seized equipment belonging to another Salyer company, and had used Salyer American executives bearing a grudge against owner and CEO Scott Salyer to assist him, the Monterey Herald reported.
However, attorneys for Mr Franson said that he had acted properly since his appointment on 6 May to organise the finances of a group close to insolvency, ensuring that employees had received their pay and paid vacation.
'We're in a better place today and the employees are in a better place than if the company had suddenly seized for a lot of cash,' said Mr Franson's attorney Reid Everett.
Judge O'Farrell asked for more time before deciding whether to remove Mr Franson as Salyer's receiver, with another hearing scheduled for 19 June.
Salyer American closed in May after lenders refused to advance further money to pay for crops that had already been cultivated, following the revelation that lenders were suing the group over claims that it hadn't paid back a US$35m loan taken out in 2007.
No comments yet