NE Pa. dairymen caught in another bankruptcy
BYJANEBKUSEE
Staff Correspondent
TUNKHANNOCK - Miik
producers in Northeast Penn
sylvania are hot, not only because
of the weather, but because
another cheese company has gone
defunct, and they feel they’ve
'been had”.
As of Wednesday, Scheps Cheese
Company in Lemon Township,
Wyoming County, has closed its
door to all shipments of milk, and
must of the 250 employees were
given temporary leaves of ab
sence.
Independent milk producers still
shipping to Scheps will have milk
picked up by Dairylea Cooperative
until August 31, giving them tune
to find another market. Producers
belonging to cooperatives have
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estimated total of 600 dairy
producers in Southern Tier New
York and Northeast Fa. have been
involved in the upheaval, with
possibly half of whom were in
dependents and received no help
from a cooperative.
No one guessed there was any
trouble brewing at the new, ultra
modern, 'facility which opened in
April, following a widely
publicized ribbon cutting
ceremony, until shippers to Scheps ■'* *
were called to a meeting in
Tunkhannock by Ben Schep,
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because the bank was withdrawing
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bankruptcy, but he was optimistic
v that bank officials would extend
the credit.
The bank of America had
reportedly discovered that a |1.2
million judgment against Scheps
- , by the Cortland Bulk Milk
Producers, Inc., for non-payment
V " of milk in May, and June, had been
filed.
■ Altera week of suspense, on July
H 25, Scheps Cheese Corporation,
V and its subsidiary, Bradford
■ County Karras, Inc. of Jamesburg,
■ N.J., filed for reorganization under
■ Chapter 11. A Federal Bankruptcy
I judge of Newark, later appointed a
I trustee to operate Scheps Com
t pany because the former
president, Ben Setups, had ad
mitted creating fraudulent m
voices to obtain bank loans
Lancaster Farming, Saturday, August 6,1983—A29
amounting to between $1.5 and $2
million dollars.
B.A. Commercial Corporation of
Allentown, Pa., owned by Bank of
America > said ttiat Scheps owned
it nearly $7.3 million and another
$5 million is owed to dairy fanners
who sold milk to Scheps!
Scheps also admitted that from
$300,000 to $600,000 are due on
withholding taxes to both the
federal and state governments,
and later it was reported that milk
producers’ money withheld on
consignment for health insurance
and KHA loan payments had also
not been paid by the cheese
company.
A plan to modernize and enlarge
the former Aldovm Milk Facility in
Lemon Township began in June,
1080, by the Scheps brothers, A 1
(Turn to Page A 35)
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