Burlington-based Waste Services Inc. (WSI) has filed a US $25 million lawsuit against Waste Management Inc. (WMI) saying the Texas-based company spread false rumors about its president in order to scuttle its plans to buy a Florida landfill site.
The complaint was filed May 3 in the U.S. District Court in Orlando. If the lawsuit is successful, the penalty against WMI could be more than $75 million under American anti-trust laws.
Waste Management spokeswoman Heather Browne rejected the allegations in an email to the Hamilton Spectator and promised a vigorous defense.
WSI alleges that in late 2002 it negotiated a deal to purchase an Orlando-area landfill site. The deal required it to raise $20 million. The landfill purchase would have put Burlington-based WSI in direct competition with WMI, which controlled the only other private landfill site in the region. WSI says that a deal for the $20 million was arranged with a syndicate that includes Lehman Brothers and CIBC, yet the loan offer was allegedly withdrawn after WMI’s president allegedly told a banker WSI’s president was about to be charged by the Securities Exchange Commission.
WSI did complete the deal, but claims it was forced to borrow money at five times the interest rate it originally negotiated, a cost that has eaten into profits. For the nine months ended September 30 the company reported a net loss of $35.1 million on revenues of $217.6 million.
Formed in May 1997, Waste Services has operationsin Ontario, Saskatchewan, Alberta and BritishColumbia as well as Florida, Arizona and Texas.
Waste Management, the largest waste managementcompany in North America, has 429 collectionoperations, 289 active landfill sites and 138 recyclingplants in the United States, as well as 20 recyclingfacilities and 18 landfills in Canada.