Two offspring of the bankrupt ZZZZ Best carpet cleaning firm are beginning to squabble as the one-time Wall Street darling and its whiz-kid founder, Barry Minkow, wend their separate ways through bankruptcy court proceedings.
A Huntington Beach man who bought the name and some of the assets of ZZZZ Best has sued a rival firm and two former ZZZZ Best workers for $10.8 million, alleging that they wrongly appropriated the company name.
Peter D. Kalb also alleges in his Orange County Superior Court suit that the rival firm, Novelty Carpet & Upholstery Care and Maintenance Co. in Reseda, and the former ZZZZ Best workers associated with it, are using customer lists stolen from ZZZZ Best.
The lists, used to call customers for follow-up sales and services, contain 10,000 to 15,000 names and represent a potential $877,000 in revenues, according to court papers.
Kalb alleges in his suit that Robert Doyle, ZZZZ Best's former vice president for operations, and Jack Polevoi, a former consultant for the firm, have been soliciting work by saying they are the "new ZZZZ Best" company.
"It's totally absurd," said Polevoi, who opened Novelty Carpet last month. "All the accusations are false. Besides, I don't think it serves any purpose to use the name. Other former ZZZZ Best employees are opening up shops all over the place."
Had 21 Outlets
The original ZZZZ Best had expanded to 21 outlets, mainly in Southern California, before it filed for Bankruptcy Court protection on July 11. Minkow followed with a personal bankruptcy petition earlier this month.
Polevoi said Doyle worked briefly for Novelty Carpet after leaving ZZZZ Best early last month and is looking for other opportunities. Doyle could not be reached for comment.
Kalb won a court order Thursday that temporarily restrains Polevoi and Doyle from using any list of customers' names obtained at ZZZZ Best. Another court hearing is scheduled for Sept. 2.
Kalb, who owns One-Stop Home Center, a carpet store in Huntington Beach, paid $62,000 on July 24 for the customer lists, name, good-will and personal property of ZZZZ Best. Kalb started Z Best Interiors as a holding company for ZZZZ Best.
With about 40 former ZZZZ Best employees and four still-operating outlets, he said he plans to turn the company into a home cleaning and decorating service.
In the next few weeks, Kalb said, he expects to open One-Stop and ZZZZ Best outlets in San Diego and the Carson area and add his One-Stop services to a ZZZZ Best outlet in Monrovia. Other ZZZZ Best outlets still operating are in Anaheim, Lancaster and Chatsworth, the company headquarters, he said.
Kalb did not buy ZZZZ Best's chemical division, equipment rental business or restoration operations.
ZZZZ Best, which Minkow founded in his parents' garage in Reseda, collapsed last month after police alleged that Minkow and the company were part of a narcotics and money-laundering conspiracy with ties to organized crime. No arrests have been made.
ZZZZ Best owes creditors $36 million but had just $30,000 in cash when a bankruptcy trustee was appointed. Minkow's 52% stake in the firm was worth more than $100 million before the collapse.