Bankruptcies are a reality in the business world, and the electronics recycling industry is no exception. Following last week’s announcement that the PCCR had filed a dossier for Chapter 7, we provide a timeline of important cases that have recently been posted on e-scrap.
Many of these closures are the result of ongoing issues in the industry regarding CRT management and commodity prices. Some companies are filing for Chapter 11 bankruptcy, which means they plan to reorganize, develop a debt repayment plan, and stay in business. Others opt for Chapter 7, indicating that they will liquidate assets to pay creditors.
The significant ripple effects of business closures continue to be felt.
PC Rebuilders & Recyclers, June 2017
The most recent bankruptcy of an e-waste company came from a well-known and respected reuse and recycling company in Chicago. PC Rebuilders & Recyclers, led by Willie Cade, filed for Chapter 7 bankruptcy on June 11 after 17 years of activity.
The company was known to host the annual Electronics Reuse Conference, which recently changed hands and will be managed by E-Reuse Services.
Few details are known about the bankruptcy, but PCRR said it has less than $ 50,000 in assets and between $ 1 million and $ 10 million in liabilities. An initial filing indicated that 70 creditors were owed funds, including several electronic scrap companies.
Global Environmental Services Indictment, March 2017
Some bankruptcies are just the beginning of a business downfall. Kentucky-based Global Environmental Services was caught burying CRT material near its processing plant in 2015. Shortly after, GES filed for Chapter 7 bankruptcy, but more problems were on the way.
The company maintained multiple locations in Kentucky as well as one in Austin, Texas. After the bankruptcy, the owner of the Texas site said GES had abandoned the site, leaving electronic components stacked “floor to ceiling” inside the warehouse and piles of CRT sand around the site. A government agency began examining the company’s other facilities in Kentucky and found “significant” quantities of CRTs inside the three warehouses.
This year the fallout continued, when GES owner Kenny Gravitt was charged with environmental law and conspiracy charges related to the CRT glass spill. Gravitt pleaded not guilty.
New Life electronic recycling, January 2017
New Life Electronics Recycling had been in business for six years when the company announced he had no assets and $ 1.14 million in liabilities in January.
In the few years leading up to the Chapter 7 bankruptcy, the Illinois company experienced several difficulties, including inconsistencies in collecting materials for a municipal program.
Company management highlighted the change in state regulations, including a rule that prohibits carriers from charging fees in municipal programs.
Diversified recycling, May 2016
The first public indication of problems at Diversified Recycling came when the company was suspended from applying for e-Stewards certification in 2015. The Basel Action Network, which administers the certification standard, said Diversified had shipped electronic devices. non-functional abroad in violation of e-Stewards Rules.
Then the parent organization of the e-scrap company filed for Chapter 7 bankruptcy, followed by Diversified itself in July 2016. The company reported no assets and over $ 4 million of possible liabilities, but a company executive said this was a misleading figure.
The the company’s problems weren’t over, however, as Diversified was slapped by a lawsuit from investors seeking their money back, and a bankruptcy trustee revealed that the company was stocking 500,000 pounds of intact CRT devices.
Zloop, August 2015
Although it was founded with lofty goals in mind, after just three years in business, a North Carolina-based e-waste processor Zloop filed for Chapter 11 bankruptcy, seeking to develop a debt repayment plan and reorganize the business.
The IT asset processing and disposal company at one point wanted to establish an electronic scrap collection across the country using a franchise system. But in 2015, Zloop reported $ 32 million in liabilities and $ 25 million in company assets. At the center of the bankruptcy was a disagreement between the processor and an OEM. Zloop claimed to have paid $ 6 million for new equipment, only to receive “damaged and incomplete” equipment worth just a third of the price paid.
As the company considered selling some of its assets, new lawsuits have built up. An investor sued for nearly $ 80 million, and NASCAR team Kyle Busch Motorsports sued for default on payments from Zloop CEO, who paid the team $ 3.2 million a year to have his son can drive competitively.
Creative Recycling Systems, September 2014
It is common for a bankruptcy to affect customers or customers of the collapsed business, but the case of Creative Recycling Systems took things a little further.
After the South Carolina processor filed for Chapter 11 bankruptcy in 2014, it was released from its lease. At this point, the former owner of the company became responsible for 6 million pounds of electronics left behind. The materials came from municipal recycling programs statewide, and the owner came to the conclusion that those programs should be responsible for cleaning up the mess.
The owner has taken legal action against 11 solid waste management agencies in South Carolina who sent documents to Creative. The lawsuit claimed the agencies knew the processor was in financial difficulty when they sent the documents, and should have known that the company could not handle the electronic scrap.