PITTSBURGH The marriage
between Metalico Inc. and Reamer Recycling Services Inc. has
ended, but it appears the 29-month union will have to be untied
by the legal system.
Ithaca, N.Y.-based joint venture
Reamer-Metalico Scrap Recycling, a full-service metal recycling
facility that serviced local and industrial suppliers in
Tompkins and Cortland counties, was officially dissolved April
1, according to a regulatory filing.
The original Nov. 10, 2010,
agreement decreed that the company would be dissolved April 1,
2013, if neither party chose to buy out the other. Cranford,
N.J.-based Metalico notified Reamer in February that it would
not exercise its purchase option and said it owed Metalico
nearly $1.17 million.
Ithaca, N.Y.-based Reamer has
filed an accounting lawsuit on the matter, claiming it is under
no obligation to pay the sum to Metalico, according to
documents filed in Tompkins County Supreme Court in New
It is unclear if the $1.17
million is solely for the assumption of debt, according to
Reamer attorney Oliver Blaise of law firm Coughlin &
Gerhart LLP. "That is one of the issues we are trying to
establish before the court. Papers from Metalico to Reamer
really dont answer this question," he said.
Reamer also objects to any
attempt by Metalico to reclassify any capital contributions to
the company as loans, according to the filing.
Metalico entered into the joint
agreement with the scrap metals processor as part of its growth
amm.com, May 4, 2011). Metalicos strategy
was to increase volumes through expanding its feeder network
and exploring select joint ventures with metal processors and
Metalicos interest in the
joint venture was said to be 50 percent in 2011 and 50.1
percent in 2012. In its recent annual report, the scrap
processor revealed that "it would terminate its Ithaca, N.Y.,
joint-venture agreement upon its expiration" but gave no
In anticipation of the
discontinued cash flow, Metalico took a goodwill write-down of
$303,000 for 2012, according to its annual report. The joint
ventures results were reported as part of Metalicos
New York State Scrap Recycling reporting unit.
Metalico has removed references
to Reamers Ithaca scrapyard from its website, but
Reamers website still features the Metalico logo.
Metalico could not be reached