Penny Johnston of Waldoboro has received accolades from around the country since she founded the Maine Float-Rope Company in March 2009.
Maine Float-Rope Co. makes doormats from the rope that lobstermen used to string between their traps. When the use of floating rope was banned, lobstermen were left with thousands of pounds of unusable rope.
Newspapers from the Orlando Sentinel in Orlando, Fla., to the Southbend Tribune in Medford, Ore., have applauded Johnston’s company for its innovation and green design.
“Penny Johnston is one of our new heroes,” gushed the online, green product catalogue UrbanSherp.com.
During a conversation on March 16, Johnston said business is good. There are orders coming in, and mats going out the doors of the barn she rents at 2464 Winslow’s Mills Rd. in Waldoboro, she said.
She sold several thousand mats in 2009, she said. Many of those sales came last summer following the 2009 New England Products Trade Show, at which she won “Best New Product,” an award that came with a $25,000 prize.
Several people employed by Maine Float-Rope Company at the time said that they were surprised by the high volume of orders coming in after the show.
A few months later, Johnston won another $25,000 prize for best business model at a conference geared toward technology companies, despite being a distinctly low-tech business.
Each of their mats comes with a tag, which have had various claims over the last year. The most recent tags were handed out at this year’s New England Products Trade Show March 13-15 at the Portland Sports Complex in Westbrook.
Those tags read, “For every mat purchased, The Maine Float-Rope Company gives a percentage of its sales to the Gulf of Maine Lobster Foundation (GOMLF) and other non-profit organizations.”
The tag goes on to say that the company supports “programs that protect whales, research that benefits the Maine lobster industry, and sound environmental practices for the state of Maine.”
At the show, when asked specifically what organizations she supports, Johnston said that the GOMLF and the Medomak Valley Land Trust are the only two organizations she has supported.
The Medomak Valley Land Trust characterizes the Maine Float-Rope Company as a “friend of the land trust,” said Liz Petruska, the director of the land trust.
Johnston sold about 25 mats to the land trust at cost last summer for them to resell, Petruska said.
That was the only commitment Johnston made to the land trust, and she fulfilled it, both Johnston and Petruska said.
However, the GOMLF is less satisfied with their relationship. The Foundation secured federal money to pay the lobstermen for the rope, to help defray the cost to the lobstermen of buying expensive sinking rope.
GOMLF then gives the used float rope, free of charge, to companies that use the rope to produce other products, such as doormats. The only cost to the companies using the rope is transportation.
“She’s told us many times that it’s her intention to make donations to the foundation,” said Laura Ludwig, project director for the GOMLF. “At the outset I was very optimistic, but the last six to eight months have been very frustrating. There have been a lot of good intentions, but not a lot of follow through.”
The Maine Float-Rope Company made a donation of $100 to the GOMLF recently, but that has been their only contribution, Ludwig said.
“It’s not the money that we’re concerned about, it’s the use of our name in her promotional materials,” Ludwig said. Prior to the trade show, the foundation had explicitly asked Johnston to stop using their name, Ludwig said.
“It’s not false advertising,” Johnston said. “I made a donation of $100. I don’t have the money to do more. I’m focusing the money I have on keeping the doors open.”
The company currently has several tons of rope – enough to last for a long time, sources at the company said.
The decision to deny Johnston access to the rope stems from the fact that Johnston owes the GOMLF money, not the fact that she hasn’t donated to the organization.
When the Maine Float-Rope Company received their first and only delivery of rope last fall, they hired a trucking firm to load and transport the rope, as they are required to by the GOMLF. The rope was delivered, but Johnston never paid the trucking company.
“I told them I couldn’t pay them right away,” Johnston said.
GOMLF picked up the tab, Ludwig said.
“There’s a certain decorum you need to maintain,” Ludwig said. Johnston has not paid GOMLF for the trucking bill. “It’s not even that significant an amount of money. It’s more that our contract was violated,” Ludwig said.
Unfortunately, the GOMLF is not the only one the Maine Float-Rope Company owes money. On March 16, Johnston failed to attend an eviction hearing regarding a complaint filed in District Court by the Maine Float-Rope Company’s landlord, David Karas of Waldoboro.
The notice of eviction was filed Feb. 1, when Johnston failed to pay rent for either January or February. She also owes back money on electrical bills from November and December 2009, Karas said.
As of March 16, she still owed Karas for the electrical bills, late fees on the missed rent, and she had yet to pay her March rent, Karas said. On March 16, a judge granted Karas a writ of possession, which gives Karas the right to seize anything on his property. On March 23, Karas said the writ would be filed that night.
“Unless there are serious changes soon, I’m planning on going forward with the eviction,” Karas said.
The company has worked out a payment plan with Karas, said Johnston and Terry Veysey on March 16. Veysey has been brought in by a group of investors to help Johnston manage her finances. However, Karas said he has yet to see the plan.
Karas, as well as the GOMLF, said that if Johnston can get her finances in order, pay her bills, and fulfill the claims she makes in her advertising, they are willing to continue to work with her.
“I just want her company to be viable, so she can make the contributions she says she’s going to, because I don’t want to be associated with a company that’s not making good on claims they make in their advertising,” Ludwig said. “I don’t really care if it’s with us, but we want her to be successful and follow through on her claims and give back to the lobster industry.”
If Johnston is able to do this, the GOMLF will restore her access to rope, Ludwig said.
Restoring relations with the GOMLF and Karas will certainly help, but the company’s struggles appear to stem from decisions that Johnston has made as the owner, said several people connected to the company.
“She’s just not a very ethical person,” said Geary Smith, the former General Manager at Maine Float-Rope Company. (Ed Note: Smith is married to The Lincoln County News Associate Editor Kim Fletcher.)
Smith left after he was unable to deposit several paychecks on time. On at least two occasions, Johnston asked him to “wait a day or two” before depositing his check, he said. On another occasion it took more than a week before the money was available, he said.
Smith worked for Johnston from September to November 2009. In the early part of his time there, no orders were coming in and he had to lay off a number of the weavers who were making the mats. Then he started to hear about people’s checks bouncing, he said.
“After the problems started with my checks, that’s when I left,” Smith said.
Johnston said that the stories about workers not being paid are entirely false. She said she has always paid her employees on time.
“Maybe someone had to wait while I moved money into the payroll account, but I don’t owe anyone (who worked for me) any money,” Johnston said.
Several people who worked for Maine Float-Rope Company, including Smith, said they are owed money.
Many people working for Maine Float-Rope Company are not listed as employees of the company; they are contract workers. Smith, despite serving as general manager, was listed as a contract worker.
“With contract workers, you don’t have to keep the same pay schedule as you do with fulltime employees,” Johnston said.
“When I came in, there were no employees,” Terry Veysey said. Veysey was brought in by the Maine Angels, a private investment group, in the beginning of February to help Johnston with cash management as part of their consideration in investing in the company.
Since that time, Johnston has moved at least one employee onto the payroll, Veysey said. Although Veysey has been working with Johnston to straighten out her debts and business relationships, right now they are working hard just to keep the doors open, both Johnston and Veysey said.
“This really isn’t uncommon with new business, especially ones that start with as little capital as this one did,” Veysey said.
“She’s still working on putting together a budget,” Moore said. “I think we’re close to having a plan ready for investors to take a look at.”
Moore said that the Maine Angels are aware of Johnston’s debts and troubles with the GOMLF, but views them as operational problems. If her debts can be paid and her relationship with the GOMLF restored for cheap enough to make the investment worthwhile, they’ll pursue it, Moore said.
The investors have been in contact with the GOMLF to discuss restoring the relationship between Maine Float-Rope Company and the GOMLF, Ludwig said. No firm deal has been made at this time, she said.
“If we don’t think she can solve those problems, we won’t invest,” Moore said. “It’s a great product; it cries out for the vibrancy of Maine products; it’s a good employment opportunity. It’s just a great business opportunity for Maine.”
