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Development agencies file suit over outstanding loans to Alteri Bakery

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Two economic development agencies have filed suit against a Sackets Harbor businessman to collect on loans he personally guaranteed for Alteri Bakery Inc.

The Jefferson County Industrial Development Agency and the Watertown Local Development Corp. filed state Supreme Court action Wednesday at the county clerk’s office against Thomas W. Scozzafava, claiming no payments have been made on outstanding loans since August.

Mr. Scozzafava, chief executive officer of Seaway Valley Capital Corp., which is the parent company of Alteri, said Wednesday he is exploring several avenues to bring the agencies’ loans current.

“I understand their frustration,” he said.

JCIDA claims it provided Alteri a $200,000 loan in May 1999, while WLDC, also known as the Watertown Trust, gave the business a $100,000 loan six months later. A subsidiary of Seaway Valley Capital, North Country Operating Corp., acquired Alteri in 2008, and Mr. Scozzafava agreed to guarantee the loans in August 2009. JCIDA claims there is about $42,000, plus interest and late fees, outstanding on its loan, while WLDC claims it is due about $65,000, plus interest and fees.

Alteri’s last loan payment coincided with the month Jreck Subs Inc. announced it was shifting its submarine sandwich roll business from the Watertown bakery to a producer in Cleveland, taking away more than half of Alteri’s business and forcing it to lay off about 20 workers.

The move prompted Seaway Valley Capital to sue Jreck, claiming it had a 2002 contract calling for Jreck franchises across the state to buy all of their rolls from Alteri. Jreck has countered that a subsequent agreement superseded the earlier agreement, allowing it to make the vendor change. JCIDA and WLDC have joined Seaway Valley Capital as plaintiffs in that action, which remains pending in state Supreme Court.

Mr. Scozzafava said Alteri was current on its loan payments for several years, but since the loss of the Jreck account, “it’s been more of a struggle” for the company.

“To injure the bakery was the full intention of Jreck corporate, and to some degree they’ve succeeded, but we’re going to get caught up,” Mr. Scozzafava said.

He said his wife is “in the process of selling an asset she controls” and, while the sale will not cover the full amount of the outstanding loan, it will allow payments to become current.

“Unfortunately, it’s taking longer than expected, but we’re hoping to do that this month, June,” he said.

A second move that Mr. Scozzafava said will enable Alteri to remain current on the loans going forward is the introduction of five “artisan” breads the company is rolling out for sale in retail outlets. The distribution plans, which are being finalized, call for the new breads to be sold across the state. Another initiative that Mr. Scozzafava calls “a big win for us” is an agreement with Maines Paper and Food Service Inc., Conklin, calling for Maines to distribute Alteri breads to restaurants around the state.

“We think that we’re going to replace the Jreck business with these two initiatives,” Mr. Scozzafava said.

JCIDA and WLDC have retained the Syracuse law firm of Menter, Rudin & Trivelpiece to represent them in the action.

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