Floyd V. Hammer's divorce from the plastic lumber company he founded 11 years ago has moved into its final stages, with a recent legal settlement. Hammer and Hammer's Plastic Recycling Corp. signed an agreement Feb. 24, ending all legal disputes, Hammer said. A year ago, management officials reduced his role, and he left in July. Now, under the settlement, he will begin selling off his shares.
``Everything's over. I'm divorced from the company,'' Hammer said.
A spokeswoman from the Iowa Falls, Iowa, firm said Hammer no longer is associated with the business. She declined to comment further.
In the 1980s, as interest grew in plastics recycling, Hammer became a plastic lumber celebrity, of sorts. His firm was featured in a Fortune recycling story. He made news with a 1989 contract to turn waste plastics into Chicago park benches. As a speaker at recycling seminars, he helped the firm double sales between 1987, when production began, and 1989.
Hammer also gained a reputation for revealing big plans that never panned out. In 1990 he said within three years the lumber maker planned to start at least 16 recycling plants across the country.
The opposite has happened. It closed its Mulberry, Fla., plant in 1992; its Chicago plant in 1993; and a Los Angeles facility that was to make highway sound barriers from recycled plastic, in April. The firm now runs two plants, one in Iowa Falls and a leased plant in Denton, Md.
Hammer's Plastic Recycling, which went public in 1993, continues to lose money. The firm lost $586,386 in 1992, $478,221 in 1993 and $1.35 million in 1994. Sales have held steady through the period, at about $2.5 million each year. The firm's fiscal year ends Sept. 30.
The legal dispute began last year. According to a 10-K filing, the firm filed suit against Hammer on Nov. 21 in Iowa District Court for Hardin County. The suit charged that Hammer in 1991 and 1992 wrongfully transferred two profitable product lines to another business, breaching his duty as president of the company. Hammer said he did nothing improper.
``The suit was without basis,'' he said.
Another defendant, Kathryn Hamilton, identified as an associate of Hammer, could not be reached for comment.
Separately, Hammer filed his own suit. Demands included money owed under his employment contract and repayments on loans he made to the company. Hammer said he has dismissed the suit.
The company issued a statement announcing its Feb. 24 settlement with Hammer, but would not reveal terms. Hammer said the parties agreed to a financial settlement. Also under the agreement, Hammer, the largest single shareholder, with some 400,000 shares, will sell a set number of shares each month, and the firm has guaranteed a minimum price, he said. When those shares are sold, that will end Hammer's involvement in the company - but not plastic lumber. Hammer said he plans to stay in the industry.
