Bankruptcy and Legal Issues and Law

Tangle with Huntington Bank could fell ‘Peanut King’

March 2, 2013

Richard Green Sr. is called “The Peanut King,” a moniker he earned more than a half-century ago, when he operated 9,000 peanut-vending machines across seven states.

Those machines, which swallowed coins in return for a handful of nuts, are long gone. But his 56-year-old Indianapolis business, the Richard Green Co.—which these days sells pretty much everything necessary to work in the food concessions business—lives on.
 

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But these aren’t good times for one of the city’s quirkier businesses—which roasts and sells about 20 kinds of nuts, in addition to hawking snow cone machines, popcorn poppers and other concession supplies. Court records show it filed Chapter 11 reorganization Feb. 19, listing assets and liabilities of between $100,000 and $500,000.

The company sought bankruptcy protection to stave off Huntington National Bank, which in January filed to foreclose on mortgages for the company’s 1827 S. Meridian St. headquarters and its English Avenue warehouse.

Green said the bank—concerned that the appraised value of the properties securing the loans had fallen—took the action even though he’d been making the required $4,900 monthly payments.

“We were doing fine,” said Green, 79. “But they insisted I pay off these buildings, and there is no way I could do it.”

He added: “They wanted me to get a different mortgage from another bank, which I tried desperately to do.”

Mike Newbold, president of Huntington’s central Indiana region, declined to discuss the company’s loans. In addition to alleging Green is in default, Huntington says in court filings that he committed fraud by auctioning off a parcel of real estate in March 2012 that served as loan collateral.

Adversity is nothing new for Green, a hardscrabble businessman who, at the age of 15, hitchhiked to Indianapolis from his Tennessee home with only $4 in his pocket.

After a tour in the Army during the Korean War, he returned to Indianapolis and worked at a 7-Up bottling plant. He spent $15 to buy his first vending machine—a small glass globe that dispensed a handful of shelled peanuts for a penny.

The cash seemed so promising that he decided to launch a business, but with a twist: He would charge a nickel, rather than the then-standard penny—a five-fold markup that, surprisingly, consumers seemed not to mind.

“Anywhere I put a nickel machine, it would outsell a penny 10-to-one,” he recalled in an IBJ interview four years ago. “And it had exactly the same product in it. I went to all-nickel machines, and that’s really why we were such a success.”

Along the way, the Richard Green Co. diversified, which kept it humming even after the unhygienic-seeming “handful of peanuts” machines vanished from the American retail landscape.

But its niche now—concession supplies—has its own challenges. With just six employees, the Richard Green Co. lacks the scale and super-low prices of competitors, including online retailers and big-box stores like Sam’s Club or Costco.

Rather than compete on price, the company plays up service. Richard’s son, Rick, told IBJ in 2009 that he was quick to offer free advice to people interested in entering the concession business—thinking that, if they did, he might land a new customer.

But that’s not always how things played out.

“I’ll spend an hour or two with them, explaining and showing them equipment, and telling what works and what doesn’t. And I never see them again,” said Green, who was vice president but is no longer with the company. “I think they just come in and get the information and then go online and buy things.”

Despite the competition, the Richard Green Co. had a loyal roster of customers and was performing OK until he and Huntington got crossways, Richard said.

The Chapter 11 filing puts the bank’s suit on hold, preventing it from moving forward with a likely auction of the real estate.

But it doesn’t solve the underlying financial problems. Richard frets he might have to sell the business or even shut it down.

“The lawyer told me the only thing I could do to save the company for a while is file Chapter 11,” he said.

“What bothers me the most is, I have employees that have been with me over 30 years,” he said. “They would have a hard time without my help. I am almost 80 years old, so it is not me I am worried about.”•

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