After a multimillion dollar lawsuit was dismissed late last week, the founder of a troubled East Coast e-scrap firm has gone on the offensive.
In a 10-paragraph statement issued to E-Scrap News, Jon Yob, the founder and former CEO and president of Creative Recycling Systems (CRS), lays the blame for the recent collapse of his former firm at the feet of Intersection One LLC, the investor group that purchased CRS from Yob in 2012.
“Things didn’t work as they promised,” Yob writes. “The company slowly came apart — for many reasons.”
Yob was until recently being sued by Intersection One for allegedly overstating the value of CRS at the time of the acquisition in 2012. That lawsuit, court records show, was dismissed “without prejudice of all claims alleged or asserted” on Sept. 26.
In his statement, which was issued in the wake of the suit dismissal, Yob asserts that Rick Bates, the CEO installed by Intersection One, “had absolutely no recycling industry experience” and that a series of bad business decisions were made “without my approval.” Yob claims “the purchase contract [between himself and Intersection One] clearly stated that any changes would need my consent.”
Yob adds the company’s abandonment of “an industry-leading technique to process and recycle CRT glass” led to “millions of pounds of unprocessed CRT glass sitting in warehouses.”
A recent report indicated more than 30 million pounds of CRT glass are being held at CRS sites in six states.
The legal team for Intersection One did not return a request for comment on Yob’s assertions.
The Intersection One suit alleged that Yob misrepresented the value of CRS when the firm was sold. “Defendants led the Investors to believe that CRS was a profitable, large-scale, stable company with healthy cash flow,” the lawsuit read. “What Defendants failed to disclose to the Investors was that this depiction of CRS was premised upon abject, widespread and systemic fraud.”
According to the lawsuit, Yob claimed his company was worth $55 million, while its true value was “approximately $20 million.”
Yob now claims he was the one misled. “In 2013, I reinvested some of my own money into Creative Recycling based on representations the group made to me,” he states in his recent comments. “Turns out, those representations weren’t accurate.”
Asked whether he would file a lawsuit against Intersection One, Yob told E-Scrap News, “All legal options remain on the table.”
CRS as a company still faces struggles. In a separate lawsuit, a Florida-based bank has sued the company for almost $19 million it says it is owed. Creative has since gone into receivership and filed for bankruptcy as it looks to close locations and sell off any salvageable assets.
The company operated three processing locations and numerous e-scrap collection hubs, most of which were concentrated throughout the East Coast.
