Consolidated Eco-Systems Inc. Announces Litigation Against Certain Subsidiaries.LITTLE ROCK, Ark.--(BUSINESS WIRE)--April 28, 1998--Consolidated Eco-Systems, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : EXSO) ("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 promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. owed by Exsorbet Industries, Inc. (of Arkansas) and to foreclose fore·close v. fore·closed, fore·clos·ing, fore·clos·es v.tr. 1. a. To deprive (a mortgagor) of the right to redeem mortgaged property, as when payments have not been made. b. on certain real estate, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , and other personalty Goods; chattels; articles; movable property, whether animate or inanimate. Cross-references Personal Property. personalty n. movable assets (things, including animals) which are not real property, money, or investments. 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 peat moss: see sphagnum. peat moss or sphagnum moss Any of more than 160 species of plants that make up the bryophyte genus Sphagnum, which grow in dense clumps around ponds, in swamps and bogs, on moist, acid cliffs, and on 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 A writing or writings that evidence both a monetary obligation and a security interest in or a lease of specific goods. In many instances chattel paper will consist of a negotiable instrument coupled with a security agreement. of the subsidiaries named in the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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. CONTACT: Consolidated Eco-Systems Inc., Little Rock James J. Connors Jr., 334/621-9989 or Chip Sexton, 501/664-7745 http://www.consolidatedeco.com |
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