Federal officials are undertaking a criminal investigation related to A. Schulman Inc.'s lawsuit against Citadel Plastics.
In a Jan. 9 earnings call, Schulman President and CEO Joseph Gingo said the FBI has identified Schulman as a possible crime victim.
Schulman filed the suit in Delaware Chancery Court in June 2016 against former Citadel owners, including Huntsman Gay Capital Partners and Charlesbank, as well as several former Citadel executives.
“As a reminder, we were contacted by [the] federal government, which is undertaking a criminal investigation relating to our allegations,” Gingo said in a Jan. 9 conference call with analysts.
“As a result of the federal investigation, the trial in the civil litigation is moved to April 2018 to provide certain parties a sufficient opportunity to retain separate counsel and become knowledgeable about the case,” Gingo said.
Fairlawn, Ohio-based Schulman acquired Citadel in an $800 million deal in early 2015. Issues related to the Citadel acquisition led to financial problems at Schulman.
Back in early November, the court had denied a request for a longer stay in the case.
Schulman claims that Citadel engaged in fraudulent business practices, including falsifying certificates of analysis for plastics compounds, before Schulman acquired Citadel.
The Nov. 2 chancery court ruling said that on Oct. 3, several former Citadel employees were served with subpoenas requiring them to produce documents as part of the FBI investigation. Those former employees included executives Kevin Andrews, Michael Huff, Jason Jimerson, Matthew McDonald and Mario Sandoval, according to the filing.
Schulman posted sales of almost $2.5 billion for fiscal 2017. The firm ranks as a leading compounder and concentrates maker in both North America and Europe and as one of Europe's leading resin distributors.