Lawsuit filed against Unisphere over C$1.06 million in unpaid principal and interest

By Sheri Kasprzak

Atlanta, Feb. 9 - Unisphere Waste Conversion Ltd. said a holder of its 6% unsecured debentures has filed a lawsuit against it, alleging the company did not pay principal and interest payments totaling C$1.06 million.

The company announced its inability to make principal and interest payments to the debenture holders on Feb. 1. An interest payment for C$625,000 was due Jan. 31. The company also did not make principal or interest payments equal to C$1.15 million due Feb. 2.

Unisphere said that the unpaid principal and interest, along with other defaults against lenders, would cause other debt to become due and payable.

"The company is unable to make its current payments and pay indebtedness," Unisphere's management said in a statement. "The company has met with representatives of the 10% secured debenture holders and discussions are ongoing."

The company has planned a special shareholders' meeting for May 6 to discuss the issue.

Unisphere subsidiary Unisphere Tire Recycling Inc. has filed a notice of intention to make a proposal to its creditors under the Bankruptcy and Insolvency Act of Canada.

Separately, former employee Victor Sibilia has also hit the company's four outside directors with a lawsuit for $5 million for ancillary relief and damages. Sibilia alleges wrongful dismissal.

"The company expects that the outside directors will vigorously defend the lawsuit, but anticipates that they will also claim indemnity for the company for any damages that the court might assess against them," the company's statement said.

Unisphere chief executive officer John Wypich did not return requests for further comment by press time Wednesday.

Based in Toronto, Unisphere is an environmental company focused on tire recycling.

On Wednesday, Unisphere's stock closed unchanged at C$0.035.

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