The founder of an embroiled East Coast e-scrap company is being sued for allegedly misrepresenting the firm’s value.
Jonathan Yob, who founded and served as the president of Creative Recycling Systems (CRS) for 18 years, is at the center of a lawsuit claiming Yob overstated the value of CRS when it was sold in 2012 to a group of investors. The investors, working together as a limited liability corporation named Intersection One, acquired CRS from Yob’s JY Creative Holdings only to come to believe they had drastically overpaid for a company barely “treading water.”
“Defendants led the Investors to believe that CRS was a profitable, large-scale, stable company with healthy cash flow,” the lawsuit reads. “What Defendants failed to disclose to the Investors was that this depiction of CRS was premised upon abject, widespread and systemic fraud.”
Yob did not immediately respond to a request for comment. A CRS representative said the firm does not comment on pending litigation.
The lawsuit, which is ongoing, alleges Yob valued CRS at $55 million while its true value, as of September of 2013, was “approximately $20 million.” The lawsuit was filed Sept. 16, 2013 and was first reported on by the Tampa Bay Business Journal.
A February 2014 court document from Yob’s legal team denies any wrongdoing.
The Tampa Bay Business Journal recently reported CRS indicated it is closing an e-scrap processing facility in Tampa. In a separate lawsuit, Regions Bank claims CRS owes $18 million in debt.
