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Suit against recyclers is dismissed

December 16, 1998|By JULIE E. GREENE

A U.S. Bankruptcy Court judge on Tuesday dismissed a $130 million lawsuit filed by the partnership that owns a failed $250 million paper recycling plant in Hagerstown, according to the New York court's website.

The fate of the recycling plant at Eastern and Memorial boulevards remains uncertain. The plant shut down in August 1997 with company officials citing a depressed market for recycled paper.

The lawsuit alleged fraud and breach of contract against Carl C. Landegger and 25 co-defendants. Landegger is chairman of Pencor First Fiber Inc.

Pencor First Fiber was general partner of Hagerstown Fiber Limited Partnership until the minor partners removed the firm as general partner because of an apparent conflict of interest with Landegger.

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After Pencor Inc. was named general partner, the partnership filed the lawsuit.

"They say that Christmas comes but once a year, but it came twice this year," said Robert Harris, Landegger's assistant.

Judge Stuart M. Bernstein in New York City had already dismissed the partnership's bankruptcy filing in August.

Harris said Pencor First Fiber officials want the plant to reopen, but that depends on the pulp market.

"The prices are down and they're very much still depressed," Harris said. The price of recycled pulp has to be between $600 and $650 per metric ton for the plant to break even. The price was between $340 and $390 as of Friday, he said.

Robert Catzen, vice president of Pencor Inc. in Baltimore, could not be reached for comment on Tuesday night.

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