U.S. Plastic Lumber Corp. last week removed Louis Paolino Jr. as chairman of its board of directors and asked him to resign from the board in light of Waste Management Inc.'s recent lawsuit against him. Problem is, Paolino won't go.
USPL's board took the action Jan. 10 as the result of a lawsuit WMI filed Dec. 30 in U.S. District Court in Wilmington, Del. The suit alleges WMI vastly overpaid in its $1.3 billion, 1998 acquisition of Eastern Environmental, headed by Paolino, because he fraudulently overstated profits.
"The USPL board felt the above actions were necessary to gain investor confidence in USPL," Mark Alsentzer, chairman, president and chief executive officer, said in a written statement.
But Paolino may have other ideas.
"I have not yet decided if I will resign as a director of USPL, primarily because I continue as a large investor of the company," he said in a statement released Jan. 10.
Paolino owns 2 million shares of USPL stock, which closed at $8.25 per share on Jan. 13.
Neither Boca Raton, Fla.-based USPL nor Paolino would return calls.
Paolino currently heads Mace Security International Inc., a Bennington, Vt., company that owns carwashes and produces defense sprays.
In another action, USPL last week accepted the resignation of board member John E. Drury. Drury, the former chairman and CEO of WMI, is recovering from brain surgery.
Drury, who resigned Aug. 16 from his positions with WMI, and Rodney R. Proto, who was fired as WMI's president the same day, were named in the suit against Paolino but were not listed among the 29 defendants.