By Frank Esposito, Plastics News
Butler, Pennsylvania -- Two families are battling for ownership of Pittsburgh Plastics Manufacturing Inc., a maker of polyurethane cushioning products based in Butler, US.
Three members of the Fortunato family filed suit 9 June in US District Court in Pittsburgh against two members of the Zona family and against PPM. The firm is majority-owned by the Zonas, with the Fortunatos owning a stake of 25 percent.
The Fortunatos - Alvin and Arlene, along with their son Darren - are asking the court to appoint a receiver or custodian for PPM, which has seen its sales fall from almost $3.5 million in 2005 to less than $1 million in each of the last two years. They also want the court to enforce an agreement they had in place with James Zona - PPM's founder, who passed away in 2009 - that would allow them to acquire a majority stake in the firm.
In addition to PPM, Zona's wife Susan Zona and daughter Angela Zona Carr are named in the suit.
The families became involved in 1985, according to a court filing, when James Zona leased space in Bellevue, Pennsylvania, from Alvin Fortunato to house PPM, which had just opened. The filing claims that Fortunato sometimes allowed Zona to miss rent payments and then bought a 25 percent stake in PPM for almost $62,000 when the firm ran into financial trouble in 1987.
The business then recovered and thrived, the filing said, with Fortunato's son Darren eventually working there for a 12-year period beginning in the early 1990s. One of PPM's key products was a liquid gel shoe insole, which it supplied to such well-known customers as QVC, Sharper Image and Dr. Scholl's.
But things took a turn for the worse after Zona was diagnosed with a brain tumour in 2008. The families then disagreed on what to do with PPM in light of Zona's condition, the filing said. An offer to sell PPM for $13.5 million fell through. Zona then offered to buy out the Fortunatos' shares for about $12 million, but they declined the offer.
As Zona's health declined, his wife and daughter "hijacked control of PPM, raided its assets and stopped making regular distributions of dividends" to the Fortunatos, according to the filing. Since 2009, the filing said, five Zona family members have received at least $1.9 million in salaries and bonuses from PPM even as the firm's financial condition has worsened.
No court dates have been scheduled in the case.
PPM makes cushioning products based on polyurethane, polyester, polyether and thermoplastic elastomers. The firm uses several processes, including injection moulding, compression moulding and thermoforming. Markets served by the firm include medical, industrial, safety and foot care.