A court-appointed receiver who is controlling a Breese food-distribution business says the company, Haag Food Service, is in the process of selling off assets and closing.
Midland States Bank filed suit against Haag in December, alleging the company owes $7.9 million on a loan, and is in default. The bank and Haag then reached an agreement calling for The Harmon Group in St. Louis to take control of the company.
“I think we’re in liquidation mode,” said Rick Harmon, director of The Harmon Group.
Harmon said there have been attempts to sell the company as a going concern, but the attempts were not fruitful.
“That led to the decision to have this significant reduction in force and go into the present operating mode,” Harmon said.
The company, which previously had 70-plus employees, had 16 as of Tuesday, Harmon said.
Harmon said it’s difficult to pinpoint what doomed the company.
“I think it’s fair to say the food-service industry has changed dramatically over the years,” he said. He said food distribution used to be a “very customer service-oriented” industry but is now an “efficiency-driven logistics business.”
The company also owes the city of Breese about $550,000 in economic-development loans. Mayor Charlie Hilmes has said the city hopes that the money will be recouped, and that a new tenant will go into the Haag property along old U.S. 50.
Haag has a 110,000-square-foot warehouse for frozen, refrigerated and dry goods.
The company boasted that it served customers in nine states in the Midwest, including chain and independent restaurants, delis, grocery stores, government commissaries and school districts. The company’s website stated that its customers included KFC, Taco Bell, Sonic, Lee’s Famous Recipe, Honey Baked Ham, Quiznos and Wing Stop restaurants.