A Boston fish company and one of the biggest seafood suppliers to Market Basket cut ties with the supermarket chain Monday. The fish company’s chief executive cited “one strategic blunder after another” as the reason and said the move would continue until former corporate employees return to work.

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Tim Malley, chief executive of Boston Sword & Tuna, said in a letter posted on the company’s Facebook page Monday that the loss of hundreds of thousands of dollars in revenue when Market Basket stopped receiving deliveries in July forced the South Boston company to consider laying off a dozen employees until Market Basket’s co-CEOs offered to offset some of the loss.

At least two payments from Market Basket included significant overpayments, totaling nearly half a million dollars, Malley said.

Protesting accounts payable employees said many vendors are calling them on their personal phones to tell them about problems they are having now with the company.

Through a spokesman, Market Basket said it is working with Boston Sword & Tuna, as well as “others who are caught in the middle,” to resolve any problems. The company put the blame for the problems squarely on striking warehouse employees, corporate office workers and drivers who walked off the job July 18.

Market Basket stopped accepting deliveries of between 50,000 and 55,000 pounds of seafood a week in July, a significant blow to Boston Sword & Tuna. Malley said his company had to buy about 25,000 fewer pounds per week of wild seafood, but because they are under contract with seafood farmers, they had to keep buying another 25,000 pounds weekly of farm-raised salmon.

“We could not simply ‘not buy’. It kept coming and we were suddenly in the position of having to sell an extra 25,000 of perishable seafood every week,” Malley said in his letter. “We were forced to significantly discount the fish to sell it. Between that and the loss of wild seafood sales we were looking at the possibility of layoffs of up to a dozen or more employees.”

Michael Scola, Boston Sword & Tuna’s president, met with Market Basket management in Tewksbury about 10 days into the protest, Malley said.

The managers were sympathetic and offered to make up some of the losses, cutting a check to Scola before he walked out the door. Promised payments failed to show for another 10 days, however. Managers stopped returning calls and emails, Malley said. Scola sent the company an email warning Boston Sword & Tuna would “look at our legal options” if the payments were not delivered.

After that email, payments began arriving, but two of them included significant over payments and were sent by hired security men, Malley said.

The first overpayment was for $83,000 and the second for $415,000, Malley said. The checks were voided and returned.

“We were dumbfounded,” he said.

“How many mistakes like this were being made?” he questioned.

Malley said the decision to make the company’s concerns public was difficult.

“We think the time has nearly run out for saving this great institution and all those who depend on it,” Malley wrote. “We felt it was time to come forward and share whatever fate awaits the Market Basket faithful. In our opinion, the only way forward is for the fired associates to come back.”

A company spokesman said Market Basket leadership wants to work with vendors through the current problems and focused blame on the warehouse shutdown that since July 18 has been a critical choke point in the employee protest and has disrupted the supermarket’s supply chain and distribution system.

“Market Basket’s leadership has been working directly with Michael Scola to find a solution that works for his company, Boston Sword & Tuna,” the spokesman said. “We do understand the problems that the shutdown of the warehouse and distribution system have caused Market Basket vendors, Mr. Scola and countless others who are caught in the middle of this situation.”

The shutdown “is precisely the reason Market Basket’s stores have had only limited perishable items in stock since,” and the company stressed it is working to “limit the damage the walkout has caused.”

“The longtime employees that ran Market Basket’s buying and distribution system walked out on their jobs, their customers and their vendors on July 18,” the spokesman said.

Mike King, the Market Basket controller who is protesting for ousted CEO Arthur T. Demoulas’ return, said he had not read Malley’s letter, but had heard replacement accounts workers were having problems.

“I think all of them are questioning their payments,” King said of the thousands of vendors Market Basket buys from. “Most of the accounts payable staff is across the street (protesting). They have some temps, but they’re not up to speed. I’ve heard of checks bouncing.”

Barbara Paquette, an accounts payable supervisor who has not been to work in weeks and who protests outside headquarters, said vendors have been calling her to complain about the replacement office staff.

“The vendors haven’t been paid in two weeks,” Paquette said. “We have long relationships with these vendors. Some of them come to the Christmas party.”

Market Basket co-chief executives Felicia Thornton and James Gooch set a deadline of last Friday for protesting employees to get back to work or risk losing their jobs, sending about 600 letters out, according to a spokesman. The company said it would not provide details about replacements.

Employees Monday said they had not received any notification from Market Basket that they had lost their jobs.

 

 

 

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