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Lawsuit claims US seafood distributor using shell company to defraud creditors

Netuno USA alleges Ocean Box was set up to illicitly obtain more credit.

Brazilian seafood processor Netuno's US arm in Florida is asking for $15,000 (€13,500) in damages from M. Slavin & Sons as well as Ocean Box. US seafood subscription startup OceanBox acquired the long-beleaguered New York-based seafood distributor M. Slavin & Sons in June, it told IntraFish.

Netuno filed the civil lawsuit July 2 with a court in Broward County, Florida accusing M. Slavin & Sons of using the new company as a rouse to defraud creditors.

The suit accuses Herbert and Barry Slavin of using Ocean Box to defraud Netuno of "monies owed under contract" and utilizing Ocean Box as a "scheme to defraud creditors by obtaining more credit" prior to closing M. Slavin.

In February of 2019 Netuno said M. Slavin placed an order through a buyer to purchase items for $11,850 (€13,214) that were paid around a month late from their March due date. In April, Slavin and Sons was then unable to pay an order to Netuno of $9,063 (€8,128) due to insufficient funds, the company said.

During this time Slavins was fraudulently transferring assets and funds to its new entity Ocean Box, "and executed a plan to utilize and maximize the credit of Slavins & Sons in order to pump it full of debt with no intention to repay the creditors," according to the lawsuit.

As of July, $169,760 (€152,240) of unpaid invoices and dishonored checks have been reported to credit monitoring agency Seafax, the lawsuit said.

Netuno said the Slavins used Ocean Box as a ruse in order to purchase red snapper from the company in May, and was also unable to pay back that purchase order.

Netuno is one of the largest importers of the fish, selling around 4.5 million pounds per year, it said.

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