Left out in the cold by Harry & David
By most accounts, Harry & David Holdings expects to emerge from Chapter 11 reorganization with a clean slate later this spring.
Who controls the Medford gourmet food and gift-marketing company and who occupies the northeast corner office overlooking South Pacific Highway will be determined in coming weeks in a Delaware bankruptcy court.
One thing's for certain, however: Nice N Easy Inc. won't be around to maintain the corporate grounds as it had for nearly two decades.
Owners John and Beth Hallett shuttered their business and are selling off equipment after Harry & David abruptly severed its relationship with Nice N Easy while still owing the landscape firm $33,000.
Harry & David listed more than 17,700 companies and people — including employees — on its worldwide creditor matrix this week. Some are owed millions of dollars, others are on retainer.
The financial and emotional wreckage resulting from the company's collapse back home in Medford, however, will largely go unnoticed by financial media, coupon clippers, lawyers or an eastern seaboard judge.
For every lawyer maneuvering in the Wilmington, Del., courthouse, there are scores of employees and vendors whose futures are at stake. Some are looking for work elsewhere, while others are pondering a difficult future.
"For the first time in my life, I'm drawing unemployment," said John Hallett, who served on the Medford City Council for 16 years and ran unsuccessfully for county commissioner and state representative posts.
Starting in 1991, Nice N Easy Inc. grew along with its primary client. As the direct marketing company's holdings expanded to 55 acres along Highway 99, the landscape company doubled its payroll to eight. Its personnel were on call 24/7.
"We maintained the rose garden to a national standard; Beth took care of that," Hallett said. "We mowed, edged, sprayed, planted, installed irrigation and even built out some landscaping areas. They even asked us to clean the windows once."
Hallett said he developed a reasonably close relationship with former Chief Executive Officer Bill Williams, rubbing elbows in civic matters from time to time. After private equity firm Wasserstein & Co. acquired what was known as Bear Creek Corp. in 2004, Hallett noticed a change that heightened after Williams was dismissed in February 2010.
"It seemed everybody was hunkering down in the east office building," Hallett said. "They were less responsive to general workers and contractors."
Hallett said he and his wife took a series of early warning signs seriously enough to reduce spending and increase saving to avoid personal financial disaster. Still, with 95 percent of their business tied to Harry & David, they stayed the course even after the storm broke.
"After we got a $25,000 check, five weeks late, at Christmas, we continued to work, fearful that we had overextended ourselves based on them not paying us," Hallett said. "We worked six more weeks and continued sending invoices."
Finally, Jay Phillips, who dealt with contractors servicing campus facilities, called and said he wanted to meet with the Halletts.
" 'We've got to lay you off, because we can't pay you any more,' " Hallett recalls Phillips saying. "I asked about them paying us for what we've done and he said, 'Give me an invoice.' It's gone into a black hole."
Phillips declined comment, referring calls to Harry & David's public relationships department.
Technically, Nice N Easy wasn't laid off. The Halletts paid their own employees, as well as unemployment insurance, Social Security and other employer costs. The landscape firm was an S-corporation, so the couple paid self-employment taxes and into the unemployment pool.
"We removed our equipment from the warehouse where we stored it and are selling it," Hallett said. "They brought in an orchard crew to do the work we did. They called us for advice a couple weeks ago. I told them if they pay us, we'd be happy to help."
Hallett said it would be too expensive to pursue legal action and he is unsure of his next career move.
"I am concerned about all those people in the community that haven't been paid," he said. "I know there are a lot of them who don't want to be aggressive because they want to do business with (Harry & David) in the future. We're all just being treated unfairly."
Mike Bartlett, who owns Bartlett Tree Service in Central Point, has done contract pruning, tree planting, removal, preservation and consulting work with the company for more than a dozen years.
While Harry & David makes up just a small portion of his firm's annual revenue, he is irked that a $2,100 invoice for tree work in the north parking lot last November was ignored.
"Over the years, I contributed a lot to their tree program out there," Bartlett said. "I called down there and no one returned my calls. I tried to email and no one returned them. I tried to set up an appointment to talk with someone, but I was told they were too busy.
"When I shake hands with someone, I hold true to my word. I expect that of other people when you do a job 100 percent — and we did a great job. We do a lot of donation work, but you can't do that all the time or you don't have enough money to support your business."
Reach reporter Greg Stiles at 541-776-4463 or e-mail email@example.com.