TRENTON — Former Lobster 207 CEO Warren Pettegrow filed for bankruptcy in the Southern District of Florida, one day before he was court-ordered to forfeit money, properties, business interests and guns to Lobster 207 toward a $1 million judgment awarded after arbitration in June 2020.
U.S. District Judge Lance E. Walker had ordered the forfeiture after nearly five years of court proceedings in federal court in Bangor.
The judgment arose from a civil lawsuit Lobster 207 filed in December 2019 alleging Pettegrow, as CEO of Lobster 207, embezzled nearly $2 million over roughly two years in a price-fixing arrangement. Pettegrow’s parents, Anthony and Josette Pettegrow, BJ Co-op manager Stephen Peabody, Poseidon Charters LLC and the Trenton Bridge Lobster Pound — the elder Pettegrow’s retail lobster business — were named as co-defendants.
The Maine Lobstering Union Local 207, part of the International Association of Machinists and Aerospace Workers, opened the Lobster 207 co-op in 2017 and hired Pettegrow as CEO, an arrangement that was part of the sale to Lobster 207 of the wholesale side of Trenton Bridge Lobster Pound.
Pettegrow was fired in April 2019 after a forensic audit raised red flags, and Lobster 207 filed suit in federal court. His Poseidon Charters sold a 37-foot Freeman Boatworks catamaran named Alliecat to Alliecat, LLC for $1. In June 2019, Pettegrow’s wife, Monica Pettegrow, replaced him as the sole owner of Alliecat, LLC. The charter business now operates out of Marathon, Fla., with Warren Pettegrow as captain.
On March 5 of this year, Judge Walker ordered Pettegrow to turn over his assets to Lobster 207.
On March 4, Pettegrow filed with the court a Suggestion of Bankruptcy — notice that he had filed bankruptcy under Chapter 11 in Florida.
A trial on the entangled case, which involves federal racketeering charges, had been tentatively set for May in Bangor, after Judge Walker on Feb. 8 ruled against a change of trial venue to Portland requested by Pettegrow, stating, “Justice delayed is justice denied. It is time for this case to conclude.”
But on March 18, the case was administratively closed, an automatic process triggered by the bankruptcy filing. An administrative closure is not a dismissal of the case — any party could file future proceedings.
And Lobster 207 did.
Bankruptcy law holds that an automatic stay against bankrupt debtors applies only to the debtor and not the debtor’s solvent co-defendants. So, Lobster 207 asked the Court to clarify that Pettegrow’s co-defendants were still held liable, and that the case “remains ready for trial and subject to assignment on the next available trial list as to defendants Trenton Bridge Lobster Pound, Poseidon Charters, Anthony Pettegrow, Josette Pettegrow and Stephen Peabody.”
Judge Walker ordered the case reopened on April 10, with a 90-day stay for all proceedings. Judge Walker requests a status report on or before July 8.
The case involves more than just financial assets because of the racketeering elements.
Lobster 207 in its lawsuit alleged Warren Pettegrow and his co-defendants operated 11 separate schemes to defraud Lobster 207, which together showed a pattern of racketeering. Judge Walker ruled two qualified under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, stating in his order, “[T]he core of the action presents fraud and racketeering allegations that place the Debtor in the eye of the storm even as to the liability of the non-debtor defendants.”
Pettegrow on May 5, 2020, settled lawsuits filed against him by insurance companies Hanover and American Fire and Casualty Company, American Fire & Casualty Company, Ohio Security Insurance Company and The Ohio Casualty Insurance Company. The insurers held “that they have no duty to defend or to indemnify the defendants against an underlying civil action brought by Lobster 207,” according to the complaint filed July 16, 2020.
Pettegrow had been ordered to forfeit approximately $90,000 held in in bank accounts and a brokerage firm, two pieces of real property (one in Somerset County and one in Wesley), three motor vehicles, ownership interests in several business entities — 100 percent interest in Poseidon Charters Inc., 10 percent interest in Winter Harbor Marine Inc., 1 percent interest in Anchor Avenue, LLC, and 33 percent interest in Pettegrow Properties, LLC, and five firearms and a gun safe.
Lobster 207 President Michael Yohe declined to comment. Josette and Anthony Pettegrow could not be reached for comment. The Islander has reached out to attorneys representing the parties.
