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Tuesday April 28, 3:53 pm Eastern Time
Company Press Release
Consolidated Eco-Systems Inc. Announces Litigation Against Certain Subsidiaries
LITTLE ROCK, Ark.--(BUSINESS WIRE)--April 28, 1998--Consolidated Eco-Systems, Inc. (OTC: EXSO - news; ''ConEco'') announced today that a lawsuit had been brought by Danville State Bank of Danville, Arkansas against its subsidiaries Consolidated Environmental Services, Inc., Cierra, Inc., Exsorbet Technical Services, Inc. d/b/a SpilTech Services, and Exsorbet Industries, Inc. (of Arkansas), seeking approximately $1.5 million on a promissory note owed by Exsorbet Industries, Inc. (of Arkansas) and to foreclose on certain real estate, accounts receivable, and other personalty which is security for the debt. The real estate involved is located in Mulberry, Arkansas, and has been used for production of a peat moss based product marketed under the name ''Exsorbet.'' The real estate was leased to another company in July, 1996. The personalty consists primarily of equipment, including vehicles and heavy equipment. Danville State Bank also seeks to obtain certain accounts receivable and chattel paper of the subsidiaries named in the litigation.
The subsidiaries involved are reviewing available defenses at the present time. It is anticipated that to the extent a defense does exist that the defense will be very limited. None of the subsidiaries named in the litigation, except for Exsorbet Technical Services, Inc., are revenue generating subsidiaries at the present time. The Company does not believe that the relief currently sought by Danville State Bank will have any material adverse effect upon the operations of its remaining revenue generating subsidiaries.
James J. Connors, Jr., President and Chief Executive Officer of Consolidated Eco-Systems, Inc., said, ''The timing of this litigation is unfortunate. The cost associated with this litigation combined with litigation from certain holders of guaranteed 7-7 debt threatens our turnaround efforts.'' Connors continued, ''ConEco gave guarantees to certain creditors of 7-7 in late 1996 which, with the collapse of 7-7, remain outstanding and in default. Some of those creditors have brought suit against ConEco. While we don't believe that the claim of any single 7-7 creditor is extremely harmful to the Company, the cumulative effect is potentially unfavorable.''
Consolidated Eco-Systems, Inc. (www.consolidatedeco.com) is an industrial and environmental services company with offices in Arkansas, Alabama, Texas, Louisiana, and Mississippi.
This press release contains forward-looking statements with respect to the results of operations and business of the Company that involves risk and uncertainties. These risks and uncertainties are detailed from time-to-time in the Company's filing with the Securities and Exchange Commission, including the Company's Report on Form 10-K for the year ended December 31, 1996 and on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, and September 30, 1997.
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Contact:
Consolidated Eco-Systems Inc., Little Rock
James J. Connors Jr., 334/621-9989
or
Chip Sexton, 501/664-7745
consolidatedeco.com
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More Quotes and News: Consolidated Eco Systems Inc (OTC BB:EXSO - news)
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