A Stoughton company with more than 300 full-time and seasonal employees is operating under creditor protection, according to its website.

Toronto, Canada-based North American Fur Auctions, which has its U.S. headquarters in Stoughton, is the largest fur auction house in the country. The company, which auctions pelts from both large fur producers and trappers, declared bankruptcy on Oct. 31, according to court documents.

Based in a nondescript warehouse across from Famous Yeti’s Pizza, the company was called a “big secret” in the city in a 2014 article by the Wisconsin State Journal. But, in court documents on the bankruptcy filing, Doug Lawson, CEO of NAFA stated “It is not an exaggeration to say that a significant portion of the worldwide mink ranching business is wholly dependent on the flow of funds from NAFA.”

The City of Stoughton agreed in December 2016 to provide about $377,000 in taxpayer funding to help NAFA expand its operations, according to previous Hub reporting. At the time, its management said this included 35 full time and 235 part time employees. The additional 110,000 square foot warehouse was supposed to allow the company to increase its workforce by 20 percent.

But in those court documents related to the bankruptcy filing, Lawson blamed an overall contraction of the fur business in recent years.

“The entire industry is still facing an unprecedented market correction,” Lawson said.

Animal welfare activists have targeted the fur industry with protests for decades, calling its practices inhumane. But many companies in the fashion industry have eliminated their fur businesses.

Department store giant Macy’s, Inc. announced a decision to drop its fur businesses last year, joining designers such as Prada, Gucci and Chanel.

“Over the past two years, we have been closely following consumer and brand trends, listening to our customers and researching alternatives to fur,” Macy’s, Inc. chairman and CEO Jeff Gennette wrote in an October press release. “Macy’s private brands are already fur free, so expanding this practice across all Macy’s, Inc. is the natural next step.”

Lawson told trappers and fur shippers in a letter this fall the company likely would not sell wild fur this year because it was losing one of its principal lenders, according to a Nov. 1 story on Canadian website CBC News.

Many fur clothing items are made of mink carcasses, and Wisconsin is the largest mink producing state in the country, according to the U.S. Department of Agriculture.

NAFA’s bankruptcy filing lists Wisconsin-based mink producers such as the A&M Dittrich Farm in Medford as some of its largest customers and creditors.

Renee Hickman can be contacted at renee.hickman@wcinet.com.