(Jan. 24) ARLINGTON, Texas — Fresh America Corp. will freeze most of its financial assets to satisfy creditors under the Perishable Agricultural Commodities Act, a first step in liquidation of the 13-year-old company.

While the amounts owed to PACA creditors were not immediately known, Louis Diess, a partner in McCarron & Diess, Washington, D.C., said between $15 million and $17 million is due to more than 40 creditors. Diess is representing Fresh America in paying PACA creditors.

Fresh America representatives indicated to Diess the company’s assets total more than $20 million, and repayment to creditors — mostly shippers — is contingent on payment from Fresh America’s clients who’ve already received product.

“This will hinge upon the ability of Fresh America and our firm to collect the accounts receivable,” Diess said.

Fresh America officials did not return telephone calls.

Fresh America’s latest financial trouble came to light as DiMare Homestead Inc., Homestead, Fla., announced it had purchased the business locations and equipment of five Fresh America repacking facilities and two sales offices. Details of the agreement were not made public, but president Paul DiMare said his company did not purchase the corporation or accept any of Fresh America’s debt.

Almost immediately, creditors, surprised at the announcement, scrambled to ensure payment.

“Most of my clients (accounts) were relatively current,” said Hartley Martyn of Martyn and Associates, Cleveland, who is representing some Fresh America PACA creditors.

“This is not a situation where for months and months people were biting their nails and hoping for the best,” Martyn said. “ … It’s a very recent action. I have a lot of clients who were shocked to hear about it. This was an ongoing business until yesterday.”

On behalf of one of his clients, Martyn on Jan. 23 filed a request for temporary injunction to freeze Fresh America’s assets in preparation for a federal court judge’s ruling on payments to PACA creditors.

The same day, he and other creditors’ attorneys talked with Diess, who agreed to the injunction. Fresh America will be allowed to use limited assets in seeking to collect money owed to the company.

“Fresh America still exists, but Fresh America is being wound down for the benefit of PACA trust creditors,” Diess said. “As the accounts receivable and the assets are liquidated, there will be no more Fresh America as far as a trading Fresh America.”

Diess said he expects a bulk of the receivables will be collected within six weeks; it is up to the judge in the case to set requirements for paying creditors.

Fresh America’s status as a national distributor/repacker had fallen in recent years. A planned merger with FreshPoint Inc., Addison, Texas, fell apart in 1999. In 2000, a five-year contract with Sam’s Club expired. At times, that contract accounted for almost 40% of the company’s sales.

During a rapid expansion in the 1990s, Fresh America grew to include 27 locations, but the network shrunk after the failed merger.

In 2001, venture capital fund North Texas Opportunity Fund LP invested heavily in the company, for a 50% stake in Fresh America.

Last year, Nasdaq dropped the company from its roster after poor financial performance