Food co-op ordered to dissolve
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Thursday that a food co-op formerly located in Avon has been ordered to dissolve after allegedly failing to properly respond to declining financial conditions.
The alleged lack of response by the management and board of Serve New England Inc., which for many years provided individuals, families and institutions with discounted food packages, contributed to the closure of the non-profit.
"There are tens of thousands of charities in this state whose mission is to help those in need, and it is disappointing that in this case the poor management decisions of a few will affect so many," Coakley said. "We felt that dissolution of this organization was the right remedy for this situation."
Coakley's office received a number of complaints that Serve New England was not delivering food packages to vendors and individuals in August 2010. The complaints alleged that individuals and families paid the organization in advance for packages of food that were never provided and that no refunds were provided for the prepaid amounts.
In addition, the complaints alleged that Serve New England promised that the food bundles would be forthcoming, but then had delayed the delivery date of the bundles. Coakley's office alleged that the organization failed to provide the food bundles and ceased responding to inquiries.
Coakley's Non-Profit Organizations/Public Charities Division did not find a misuse of charitable funds by the charity or its employees, but alleged that Serve New England's former executive director Ann Adams and other members of management and the board failed to plan for and respond to changes in the marketplace in the organization's own finances at a time when its services were in greater and greater demand. The management's alleged failure to adapt to changing circumstances led to cash flow problems, unpaid vendors and customers who made prepayments for food they would never receive.
Coakley's office also alleged that Serve New England's board of directors ultimately failed to take the necessary steps to provide the kind of oversight that good governance practices required. Coakley's office said that it was the board's responsibility to pursue management for adequate responses or to make changes in management.
In a letter addressed to Adams and the board of Serve New England, Coakley's office is requiring that the organization dissolve after it files its remaining financial filings for the fiscal years ending in 2009 and 2010. The failure to submit these filings will result in the assessment of civil penalties against each member of the board that can accrue at the rate of $50 per day per missing report.