Trade experience survey data reported on Stonehedge Produce Corporation (Stonehedge) BB #:375070, previously located in Atlanta, GA, never exceeded more than two trade reports.
Claim Activity
One of the reports came to Blue Book in the form of a claim filed against the company. The claim was for unpaid invoices in the amount of $40,000 and was reported as “meritorious” by Blue Book on April 21, 2022.
The seller made remarks about the company not sending checks, when the buyer claimed they had. The seller also indicated that after a while, Stonehedge became unresponsive.
Another claim was filed with Blue Book on the afternoon of April 4, 2022. There were no apparent disputes regarding quality or price on the outstanding invoices, which totaled just under $30,000.
Once again, Blue Book claims analysts were unable to reach the company.
As a result of the trade experiences, the claims, and Blue Book having left messages for Stonehedge ownership to discuss, as well as finding emails were bouncing back, the rating department again reported the numeral (85) on April 5, 2022, to reference limited but reported poor trading experiences and Blue Book’s inability to reach the company during normal operating hours.
Three additional claims were received by Blue Book immediately after (85) was reported, all for unpaid invoices. Total claims filed amounted to just under $140,000 and all were reported as “meritorious” between April 21 and May 5, 2022.
In each of the claims filed, Stonehedge was unresponsive to inquiries by Blue Book claims analysts.
On April 26, 2022, three weeks after reporting the (85), with no response from Stonehedge related to its operating status or condition of the company, Blue Book completed its due diligence and reported the numeral (113). This numeral means, “reported suspended operations; obligations reported not fully liquidated.”
A few months later, in August 2022, PACA imposed sanctions on the company for failing to pay reparation awards in the amount of $35,000.
The sanctions included suspending Stonehedge’s PACA license and barring responsibly connected personnel from engaging in PACA-licensed business or other activities without approval from the U.S. Department of Agriculture (USDA).
Final Thoughts
Although produce business closures are down for 2022, it is still necessary to understand that approximately 20 percent of all first-year businesses fail.
A business having operated less than a year tends to have limited trading experiences reported to Blue Book, which can make trading decisions far more difficult.
This company’s rating history also involved a numeral assignment from the time the company was first listed. Numeral notation implies that a noteworthy operational condition exists. Table 2 reflects the company’s rating history.
Table 2
| Effective Date | Rating |
| 5/4/2021 | (85)(87) |
| 9/22/2021 | (60)(83) |
| 4/5/2022 | (85) |
| 4/26/2022 | (113) |
| 8/4/2022 | (113)(152) |
A Blue Book score was never published given the limited trading experiences and length of time the company was listed.
Certainly, Stonehedge is not the only first-year produce company that went out of business in 2022.
Other produce businesses that closed within their first year during 2022 were: Cantero Produce Corporation, Panama City, FL; Delgado Fresh Corporation, Jacksonville, FL; Evergreen Produce, McAllen, TX; Fresh Florida Products, Inc., Orlando, FL; and others.
When making decisions whether to sell to a new or prospective company, it’s important to first look into the company’s rating line, as well as its score, even if neither exist yet.
In addition, it’s also important to pay special attention to the company’s listing content—legal name, personnel history, contact information, how it operates, and whether or not it is licensed.
Trading partners should gather as much information as possible to make informed decisions, but should always follow their own company’s credit procedures and policies.
Selling to new businesses often turns into very profitable partnerships. But deciding to trade with a first-year business requires more vetting, and first-year businesses should not only understand this but be prepared to answer questions and provide as much information as possible.
This is an excerpt from the Credit and Finance feature in the January/February 2023 issue of Produce Blueprints Magazine. Click here to read the whole issue.
