Misuse of Name, Customer Lists Charged : New Owner Sues Ex-ZZZZ Best Workers
Although the ZZZZ Best carpet-cleaning company declared bankruptcy last month, its distinctive name lives on--and is now the focus of a lawsuit.
Peter D. Kalb of Huntington Beach, who bought the name and some of the assets of ZZZZ Best last month, has sued a rival firm and two former ZZZZ Best workers, alleging that they wrongly appropriated the company name.
Kalb also charges in his Orange County Superior Court suit, which asks $10.8 million, that the rival firm, Novelty Carpet & Upholstery Care & Maintenance Co. in Reseda, and the former ZZZZ Best executives associated with it are using customer lists stolen from ZZZZ Best.
The lists, used in calling customers for follow-up sales and service, contain 10,000 to 15,000 names and represent a potential $877,000 in revenue, according to Kalb’s suit.
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.
Kalb won a court order Aug. 13 that temporarily restrains Polevoi and Doyle from using any list of customers’ names obtained at ZZZZ Best. Another court hearing is scheduled Sept. 2.
“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.”
Polevoi said Novelty solicitors had first told prospective customers that the new company was staffed by former ZZZZ Best employees, but found that the reaction was “very, very negative. When we mentioned we were past ZZZZ Best employees, people didn’t even want to deal with us.”
Attorney Martin Simon, who is representing Novelty, Polevoi and Doyle, said that the firm was checking with its employees who had worked for ZZZZ Best to see if any had taken customer lists. But “as far as we know, there were no computer lists with 15,000 customer names,” as the lawsuit alleges, Simon added.
The original ZZZZ Best was founded by Barry Minkow in his parents’ Reseda garage when he was 15. He said each “Z” stood for a child he planned to father. The company became a hot Wall Street stock and expanded to 21 outlets in California, Nevada and Arizona before suddenly collapsing amid charges of fraud and theft earlier this year.
Los Angeles Police Chief Daryl F. Gates charged last month that Minkow and ZZZZ Best were part of a conspiracy to launder narcotics profits for organized-crime families. Investigations are continuing, although no arrests have been made.
ZZZZ Best filed for Bankruptcy Court protection on July 11. Minkow, whose 52% share of the firm was once worth more than $100 million, filed a personal bankruptcy petition on Aug. 7. ZZZZ Best owes creditors $36 million, but had just $30,000 in cash when a bankruptcy trustee was appointed.
Kalb, who owns One-Stop Home Center, a carpet store in Huntington Beach, paid $62,000 July 24 for the customer lists, name, good will and personal property of ZZZZ Best. He 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.
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.
Doyle, however, said in an interview two weeks ago that he had founded Novelty on July 14 and sought Polevoi’s participation for financial backing. The two men said at that time that Polevoi was president of Novelty and Doyle was vice president.
