Standard Beef survived the Great Depression and World War II. Now it has survived two modern threats: The Great Recession, and an alleged embezzler in its midst.
Last week federal Judge Lorraine M. Weil in New Haven approved a plan for Standard, one of New Haven’s oldest meat companies, to reorganize under Chapter 11 of the U.S. Bankruptcy Code. The company’s staying in business.
Standard Beef filed for bankruptcy last year. Difficult economic times contributed to its problems. So did an alleged inside job: a $237,000 embezzlement.
Although bankruptcy can continue to cause problems for companies, “this bankruptcy case has a reasonably good ending,” said Judge Weil. The company’s saved, as are its 25 jobs.
The Bawarsky family founded Standard Beef on State Street in 1921. The company survived the Depression and the war, and has remained in the family’s hands through three generations.
Henry Bawarsky took over the business in 1949 and was part of the effort that created the Food Terminal at Long Wharf. In 1963, the company relocated there, where it has remained ever since.
Henry Bawarsky’s son, David, became president in February of 2008. David remembered working in the shop as a kid. He continued to work there after he graduated from high school, but eventually moved to Florida. When trouble began for his father, he realized that he needed to come home. One day he was in Florida and the next he was in New Haven trying to resolve the issues threatening to put his father out of business, he said.
His father said the problems started for Standard Beef, when Philip Friend tried to buy it. Although Friend never bought the company, in August of 2007, he acted as the company’s consultant gaining control over day-to-day matters. During this time, Henry Bawarsky was in an accident and hospitalized. Since no one was keeping a close eye on the business, Friend was able to covertly take money, according to the Bawarskys and the police. It was not until after Standard Beef filed for bankruptcy that the company became aware of the full extent of the alleged embezzlement and other mismanagement. According to the Bawarskys, Friend bought over $30,000 worth of boxes that were never used. He also incurred a debt with another meat company, West-Conn, which caused the company to become involved in the bankruptcy case.
“He had been using the company as his own piggy bank,” David Bawarsky claimed. Added Henry: “He stole a lot of money from us and caused us to go bankrupt.” New Haven police arrested Friend, who lives in Ridgefield, on larceny and forgery charges. Friend has pleaded innocent; a woman at his home was quoted telling the Danbury News-Times that the charges were “trumped out.”
In addition to the unique circumstances of embezzlement, the economic climate affecting all businesses exacerbated Standard Beef’s problems and caused the bankruptcy, said the company’s attorney, Carl Gulliver.
In the first quarter of 2009, 14,319 U.S. businesses filed for bankruptcy, a dramatic increase from 8,713 in 2008, according to the American Bankruptcy Institute. In Connecticut the number of bankruptcy cases are at a high of 2,285.
In spite of the bankruptcy, the workers at Standard Beef have been taken care of, said Brian Petronella, president of Local 371 of the food and commercial workers union. The union has had a good relationship with the company for 40 years, Petronella said.
He added that his workers may still have jobs, but the wholesale food industry is suffering. “People just aren’t eating at restaurants as much.”
Reorganizing under Chapter 11, Standard Beef can continue operating, keep its customers, and , can compete with other companies, said Henry Bawarsky.
David Bawarsky called the process as an opportunity to reinvent the company. “Good things can come from bankruptcy,” he said.” When he took over, he sought to move the company in new directions. It is launching a new brand called Harry’s Premium Meats (named after his grandfather), which will update Standard Beef with the trends of the industry. The company now plans to deliver fresh packaged meat, such as the new Harry’s Premium branc, to supermarkets, in an effort to cut costs. Standard Beef used to service mostly meatpackers and butchers; the idea now is to broaden the customer base.
“There has always been recessions and things come back,” Henry Bawarsky said. “We get by. We serve a purpose.”