State’s first farm share bankruptcy filing delivers surprise, frustration to customers (corrected)
Hundreds of Boston-area consumers who bought shares in a popular meat, poultry and vegetable Community Supported Agriculture farm have been left with no food deliveries and likely no chance of a refund after the farmer filed for bankruptcy last month.
The court filing for Robert Varisco, owner of John Crow Farm in Groton, listed creditors including about 350 CSA shareholders, many in Cambridge, who are owed a total of about $165,000. Varisco said in court papers that he had a little more than $4,600 in the bank, $1,750 in household goods, cars and trucks worth $25,000, some ducks and geese, and no income. His “significant other” is paying his living expenses “temporarily,” the court papers said.
CSAs have become a favored way to buy fresh, local food and support small farms across the country. Customers buy a “share” at the beginning of the season that entitles them to part of the harvest, usually in monthly deliveries. The advance payments are supposed to help farmers pay for seed and other supplies, labor and equipment and give them a reliable income.
But if something goes wrong, CSA customers have little recourse. In the case of John Crow Farm, the first inkling of a problem came earlier this year when the farm didn’t make a couple of monthly deliveries and shareholders couldn’t reach Varisco. By that time, customers had long since paid for their shares.
Personal, not corporate filing
The farm’s website still doesn’t mention the bankruptcy. Many customers didn’t find out about the filing until they got official notice from Bankruptcy Court, in some cases as recently as this week. Varisco filed April 14, but his list of customers was incomplete.
Court papers say he made an “emergency” filing because of “pressing creditors, Commonwealth and AG involvement.”
Adding to the confusion for consumers, Varisco filed as an individual; John Crow Farm, the corporation, isn’t in bankruptcy, said Anne White, the U.S. trustee for the Bankruptcy Court assigned to Varisco’s case. Because of that, White said, it might have been a mistake to list the hundreds of CSA customers as having claims in the case.
When consumers call her, she said, she explains that “sadly the farm is not operating” and it is not part of the bankruptcy case.
As trustee, White is supposed to represent the interest of people and companies owed money in a bankruptcy case. “I’m going to ferret through the issues in this case as best I can,” she said.
Whether or not the customers should have been included, the filing makes clear that by the time Varisco filed his case, there wasn’t anywhere near enough money to pay them back. Even including about $48,000 in property owned by John Crow Farm, not Varisco, resources would fall short. The farm also owes $207,000 to the Farm Service Agency, an arm of the U.S. Agriculture Department that helps farmers with loans and other aid.
Laurie Carver of the agency’s Massachusetts office said she could not comment because of “privacy concerns.”
Varisco held three “emergency auctions” of livestock in March that netted $11,771, court papers said. Of the total, about $6,600 went to the Farm Service Agency.
The filing didn’t explain what happened to the money CSA shareholders paid or say what went wrong with the business. Varisco’s attorney, Robert F. Casey, didn’t return a phone message left Wednesday.
A number of customers organized a “What Happened to John Crow Farm?” Facebook page where several said they filed complaints with the Attorney General’s Office. Spokeswoman Jillian Fennimore said the office has received 35 consumer complaints. “We intend to monitor the bankruptcy proceedings to learn more about the circumstances of the business closure,” she said in an email. So far the office has not filed papers to participate in the case.
Often the Attorney General’s Office refers consumers to its mediation service. Some posters on the Facebook page said they had been told Varisco isn’t cooperating with mediators.
Other customers said they have switched to another CSA, and still others on the page said they operate CSAs and offered free or reduced-price shares to John Crow customers.
Rare for CSAs
John Bonanno, president of the Massachusetts Farm Bureau Federation in Marlboro, said he had never heard of another CSA bankruptcy in Massachusetts. “I don’t see this as any reflection on CSAs as a whole,” Bonanno said. “I would hope that people realize that sometimes individual businesses fail. I feel bad for all the people who paid money and don’t know what their recourse is.”
Amy Mahler, a spokeswoman for the state agriculture department, said CSAs are growing in popularity. “This sort of thing we haven’t heard of before,” she said. Asked whether the bankruptcy might scare consumers away from CSAs, Mahler said people should make sure they have a “good relationship” with their food provider.
A Colorado farm that operated the largest CSA in the country, with a reported 4,500 customers, has filed for bankruptcy four times, with the most recent filing in January 2013. But Grant Family Farms’ main business was selling food wholesale. It appears that only one filing threatened to leave CSA members in the lurch.
The owner, Andrew Grant, has called the CSA business its most profitable venture. Recently Grant started a new, much smaller CSA while the latest bankruptcy is still pending.
This post was corrected May 19, 2014, to add that about Varisco’s creditors include some 350 CSA shareholders. The story identified a larger number originally.