ZANESVILLE, OHIO -- Recycler Coll Materials Group LLC has closed and its formers owners have opened a new business, Y City Recycling LLC.
According to federal court documents, Coll defaulted on four loans and owed more than $4.2 million to the Community Bank of Zanesville, Ohio. The bank sold Coll's assets in a private sale.
Brian Coll, former president, CEO and co-owner of Coll Materials, purchased those foreclosed assets and used them to open Y City Recycling, said Matt Elli, executive vice president of Y City.
Elli was the vice president of finance and community development at Coll Materials.
Brian Coll, president, CEO and owner of Coll Materials, filed paperwork Nov. 20 with the Ohio secretary of state's office to open Y City.
The Y City plant is operating at Coll's former headquarters in Zanesville and at Coll's plant in Waco, Texas. The company has 70 employees, Elli said.
Y City is a brand-new company with different ownership, he said.
Coll Materials was owned by a partnership of different owners, while Y City is family-owned, he added.
Coll appears to have been in financial trouble for several months.
New York-based Fifth Street Finance Corp., which invested $9.8 million in Coll's predecesor company in July 2007, said as of Sept. 30 that Coll is likely to default on the loan, according to SEC filings.
Fifth Street marked down the fair value of the investment to $3 million in the fourth quarter of 2012.
In Fifth Street's fourth-quarter-earnings conference call, held Nov. 29, Chairman and CEO Leonard Tannenbaum had unusually harsh comments about Coll Materials.
Tannenbaum said Fifth Street was "extremely disappointed in the company [Coll Materials]. We are extremely disappointed in what we were being told by management. … The plans weren't being met at all. We were misguided by the budgets, and that happens when you have these smaller companies."
He said Coll was a problem that "we just have to clean up, and we expect it to be cleaned up in the next six months, one way or another."
Fifth Street has initiated legal action against Coll Materials, Tannenbaum said in his firm's Feb. 7 conference call.
Brian Coll had opened Coll Materials in 2008 as a one-man brokering firm he ran out of his home. The company quickly earned a reputation for aggressive growth — it purchased the bankrupt Nicos Polymers Group for about $10.5 million in 2011 and opened a $6 million plant in Waco a few months later. Brian Coll also had told Plastics News the company would open a plant in the Pacific Northwest by the end of 2012.
At its height, Coll Materials said it was making $55 million to $60 million and reprocessing as much as 150 million pounds of resin annually.
But Coll Materials' story was not without drama.
Shortly after Coll purchased Nicos, the company's newly acquired plant in Nazareth, Pa., was destroyed in a massive fire. Coll moved operations to a plant in Allentown, Pa., and said it invested about $12 million in equipment for the facility.
Elli said the purchase of Nicos Polymers contributed to Coll Materials' demise.
"It was a combination of factors that led to what ultimately happened," he said. "The burden of high-interest debt that came with the purchase of Nicos Polymers, combined with a catastrophic fire at the facility burdened the company with debt that was too much to overcome."
Coll closed its Allentown site in October 2012 and consolidated operations into its Zanesville plant. At the time, Brian Coll said the company would be purchasing a plastics recycling company in North Carolina by the end of the year, making the Allentown plant redundant.
Coll Materials had to repay the state of Pennsylvania a $150,000 jobs creation grant for closing the Allentown facility.
The North Carolina plant never materialized. Funding for plant fell through and the purchase didn't pan out.
"The hope at the time was to ultimately secure the company and make sure its future was sound … those opportunities didn't come through," Elli said.
Eastman Chemical Co. filed suit against Coll Materials for materials, valued at more than $75,000, which were stored at the Nazareth plant and destroyed in the fire. Eastman later dropped the suit.
In June 2011, Coll won a three-year contract to make railroad ties from recycled plastics for Axion International Holdings Inc. It was the company's first foray into finished products.
By the summer of 2012, Coll was no longer making the ties for Axion.
In late 2012, equipment manufacturer ACS Auxiliaries Group Inc. sued Coll Materials for more than $667,000, alleging that Coll purchased and did not pay for 12 Cumberland granulators. ACS accused Coll of attempting to sell the machines online.
This month, ACS asked for a default judgment against Coll, citing Coll's failure to respond to the suit and the Community Bank's intent to foreclose on and sell Coll's assets.
The bank listed ACS, along with equipment manufacturers Deere & Co. and Crown Equipment Corp., Dell Financial Services, the Ohio Department of Development and Axion as other creditors.
