Angel Food Ministries and its founder and CEO, Wesley Joseph Wingo, have been sued by an Arkansas company for breach of contract.
The lawsuit was filed recently in U.S. District Court in Athens by National Elite Transportation, based in Springdale, Ark.
It alleges Angel Food Ministries, which is based in Monroe and operates in 45 states, entered into a business agreement with NET in October 2008 in which NET would arrange for freight transportation for the nonprofit. It says Angel Food agreed to pay the company the cost of each shipment brokered by NET plus a 20 percent administrative fee for each shipment.
Additionally, the suit claims, Angel Food also agreed to pay NET 30 percent on all rate savings secured as an incentive.
NET says in the lawsuit that it never received a payment under the incentive provision of the contract. The company estimated that incentive would be at least $1 million and seeks that amount plus interest, costs, expenses and attorney's fees.
Steve Savage, a spokesman for Angel Food Ministries, which sells food at steeply reduced costs to the needy, said the lawsuit stemmed "from a contractual dispute regarding our transportation. We deny the allegations of the suit and it's currently being reviewed by our attorneys. This complaint was brought by a former transportation broker that has not done any work for us since 2009."
NET and its attorney declined to comment.
A string of problems have plagued the nonprofit over the years. In 2009, federal agents searched Angel Food's offices. Late last year, an attorney for Angel Food said the organization is cooperating with investigators.
Since the start of 2011, the nonprofit has laid off four full-time employees -- two in ministry development and two in maintenance. Angel Food Ministries has 121 full-time and 229 part-time employees.
"We held off reducing our workforce as long as possible by increasing efficiencies and absorbing costs but eventually had to make adjustments," Savage said.
“We continue to serve hundreds of thousands of those in need despite the challenges posed by higher food and fuel prices and lower product volume.”
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