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Katie Hudgens believed in the Santoscoy Food Group.

Like her co-workers, she really liked its Dos Pistolas salsas, and believed the small, local company could break big.

And she believed that after she and three others worked without pay for seven weeks, through the holidays, Santoscoy's owners would reward her commitment. Even now, the former executive assistant says, "I think that we were just a few weeks away from being a big company."

Santoscoy was the brainchild of Sandra and Paul Sherer. They were fixtures in the Springs, having owned and operated Café El Paso on North Nevada Avenue for 10 years, but Sandra had the dream of mass-producing salsas based on a family recipe.

In October the Sherers closed their restaurant, saying they'd focus exclusively on the salsa business. As Sandra told a Gazette reporter, "Paul and I have always been risk-takers. We have a lot of faith, and good things have been happening."

Hudgens and three of her colleagues were fired Jan. 4.

Sandra Sherer refers questions to her attorney, who won't discuss specifics of the business.

Show us the money

"I was compensated with the love and appreciation of a 1,000 rainbow-colored leprechauns," says Travis Taylor. "And not a damn one could grant a wish."

Translation: He claims he was paid nothing.

Taylor met the Sherers at their restaurant, saw the promise in their salsa, and forged a business partnership with them. Santoscoy Food Group was formed last April, with Taylor taking the title of COO.

"Travis was very good at getting us into stores," Hudgens says. "We were a no-name product, and we were about to be national."

Through his efforts, Taylor says, they landed a deal with McLane Company, one of the world's largest food distribution chains.

"Literally, we went from no stores when I started," Taylor says, "to 850 stores."

They were in regional Whole Foods Markets, Hudgens says, and in Albertsons, as well as other supermarkets. To this day, you can buy Dos Pistolas at the Whole Foods on North Academy Boulevard.

There was also talk of a contract with Safeway. "That was a million-dollar deal," says Hudgens. "That was the golden goose."

Despite the success, however, there never seemed to be enough money. There were little things, like what's described by Hudgens' brother, Joe, who worked for the company. He says that he once spent $150 of his own money to ship product through FedEx, with the promise that he'd be reimbursed. He claims he's still waiting.

Then the paychecks stopped.

Nadia Cordoba's paperwork suggests she's owed around $3,000, similar to the others. She says she's had to borrow money to pay her mortgage, and has been going to a food bank since December.

Joe says he needed help to pay rent; his sister dipped into her savings. They've fallen behind on bills.

Lisa Hahnenberger says she was evicted. With her young daughter, she moved in with her grandmother.

Each has pieces of the picture of why the business failed, but in the end they all point to poor management.

"If Travis and Sandra had communicated and actually talked with each other and worked together, that's the bottom line," says Katie Hudgens.

Joe Hudgens says Sherer and Taylor constantly gave the employees conflicting directions, and told them completely different stories about the company's money.

"I don't know if it was management, or lack of communication," he says. "I think that they were constantly lying to each other about where the company was, and so they would just stack a lie on top of a lie on top of a lie, and then we were broke."

Katie Hudgens calls it the question "that all of us have had for several months now: Who's lying? Travis or Sandra? Probably both."

The end

Taylor claims he's owed hundreds of thousands of dollars, based on estimates of his work as marketer, salesman and COO. He intends to sue the Sherers, as he claims that they handled all of the business' money.

Attorney Jim Reed cautions that the Sherers see the situation "very differently" from Taylor. "Even the back pay has to do with Mr. Taylor, but we'll leave it at that."

If Taylor files a lawsuit, he adds, they will lay out their claims in the response.

"It is a company that probably should have succeeded but it didn't," Reed says, "and they're very much at odds as to why it didn't."

The former employees filed a wage complaint against Santoscoy with the state Division of Labor in January. They're still awaiting the outcome. According to Bill Thoennes with the Department of Labor and Employment, if the company is found to owe back pay, it's in violation of the Colorado Wage Act. And regardless of whether the company is solvent, the state will assist the employees in claiming that money.

They can also seek recompense in small-claims court, an option they're still considering.

"The thing that really got me," says Joe Hudgens, "is that as they started getting farther and farther behind on their paychecks, they kept promising, 'We're going to settle all of you up. Everything's going to be fine. No one's going to get evicted, or be late on their bills.' For weeks and weeks this went on, and then one day they were like, 'You're all laid off — and we don't have your money.'"

chet@csindy.com

  • Once-promising salsa business ends in a mess — especially for jilted workers.

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