With a multimillion dollar lawsuit on its plate, Creative Recycling Systems has filed for bankruptcy and decided to close or sell all of its e-scrap locations.

After an extensive review of Creative’s holdings, the company’s receiver, Robert Swett, determined that the only potentially profitable — and sellable — operations were in Florida and North Carolina. The company has operated e-scrap processing facilities in each of those states.

A separate office building in Florida has also been identified as an asset to package with the others in a potential sale, Jay Verona, Swett’s legal counsel, told E-Scrap News.

The company’s remaining processing facility, located in Palmetto, Georgia, and numerous other storage and office sites have already been or will be closed, Verona confirmed.

“As for the rest of the leases, we’ve filed motions to reject those leases,” Verona said.

The company’s filing for Chapter 11 bankruptcy was approved by a Florida bankruptcy court judge Sept. 3, court documents show.

Verona could not provide an estimate of how many jobs will be lost as a result of the anticipated closings.  Creative had been dual-certified to both the e-Stewards and R2 standards.

A loan of $1 million has also been requested from the plaintiff in the case, Regions Bank, to “operate the company in the short term along with the other revenues that the company generates,” Verona explained. Regions Bank is suing Creative and related affiliates for $18.7 million. Swett was appointed a receiver for the company in July.

Swett has not been available to discuss what each inventory revealed or how much material the company has amassed — and will need to process. One former Creative employee, who spoke on the condition of anonymity, said the company has more than 5,000 tons of CRT glass it will need to manage.

Rumors of uncertainty surrounding Creative’s future have swirled ever since the Regions Bank lawsuit emerged and plans to layoff 74 employees in Florida followed. In recent weeks E-Scrap News has reached out to officials in every state where Creative has had a location, with numerous sources noting interruptions in service but few having a clear sense of whether or not the company would continue operating.

In North Carolina, a state where Swett thinks Creative might still have attractive assets, service disruptions have been going on for more than a year, Rob Taylor, who heads the Local Government Assistance Team at the North Carolina Department of the Environment and Natural Resources, told E-Scrap News. After abruptly opting out of most municipal collection programs last year, Creative held on to contracts in Mecklenburg County, Wake County and Moore County as well as with the city of Durham.

But this summer, service to those clients was also cut off, Taylor said, leaving a backlog of material to be cleaned up and a handful of important municipalities scrambling to identify new partners.

As for the reason, Taylor ventured an educated guess that Creative was outbidding its competitors in North Carolina — namely Electronic Recyclers International, Synergy and E-Cycle Secure — by putting in the lowest bids to OEMs required to fund recycling efforts in the state and then even offering municipalities money for their CRT-dominated e-scrap stream.

“Their offer was always an orange in a basket of apples,” Taylor said. “Maybe they were hoping there’d be a better quality stream with less CRTs.”

Meanwhile state officials up and down the East Coast, Creative’s primary swath of business, have had a hard time reaching the company, especially in states where service has appeared to stop altogether. “I am concerned since the state’s primary contact has not responded to my requests for information to-date,” one official wrote just days before the company filed for bankruptcy.