Kings of Rubbish to Expand Empire : 40 Years of Collecting Other People’s Trash Pays Off as Asadurians Plan Diversification
Manny and Sam Asadurian live next to each other in sprawling homes on a hillside in Moorpark. They each have a 1987 Rolls-Royce in their driveway. In front of Manny’s home is a swimming pool and behind his home is a pond stocked with catfish. Deer graze freely nearby. Below their homes on the hillside, white fences encircle the prized thoroughbred horses that they race at Santa Anita.
It’s all a testimonial to what 40 years of hauling garbage can do for a family’s fortune.
The Asadurian brothers took over a one-truck garbage route from their father that was grossing $250 a month. Now, the Asadurians are the rubbish kings of eastern Ventura County, worth untold millions, and control public and private rubbish companies doing nearly $30 million a year in sales.
Little known outside of Moorpark, the Asadurians now plan to make their name known to Wall Street. One of their companies, G.I. Industries in Simi Valley, went public last year, and the family’s goal is to boost G.I. to the $100-million sales plateau inside five years.
The patriarch is Samuel Asadurian, 61, a short, gravel-voiced man. He dresses like a gentleman horse rancher in leather boots, slacks, cowboy shirt, gold watch and a horseshoe-shaped diamond pinkie ring the size of a sugar cube.
Vanity License Plate
His brother is Manuel Sr., 56, chairman of G.I. But everybody calls him Manny, which is what’s on his Rolls-Royce’s vanity license plate.
The brothers have transferred most of the control of their business to their sons: Sam’s son is Carl, 35, while Manny’s son is Manuel Jr., 31. Both are senior vice presidents.
“The boys want to grow,” Sam Asadurian said, “so I figured this is a good vehicle for them to continue growing.” A public company, he said, can more easily line up outside financing and use stock to buy other rubbish companies. Having a public company also will enable the younger employees of G.I. to own some stock as well, he said. “Let them be part of it with our sons.”
In the fiscal year ended last April, G.I. showed a $397,000 profit on $3.8 million in sales. But it doesn’t reflect the scope of the Asadurians’ holdings.
In November, G.I. Industries bought two more more privately owned Asadurian trash-collection companies, Conejo Enterprises and American Rubbish, for 1 million shares of stock. It boosted G.I.’s annualized sales to about $15 million to $17 million a year, said Daniel Van Rossen, G.I.’s vice president of administration.
There remain several other rubbish companies in which the Asadurians have interests, which may be blended into G.I. Industries.
Last year, the Asadurians brought in W. Michael Reynolds as G.I.’s president. Reynolds, who separately runs a Burbank brokerage firm, JP Michael, said G.I. plans to buy rubbish companies in California, Arizona and Nevada, and to offer a computerized billing service for small, under-equipped rubbish firms. G.I. is also diversifying: it owns Thrifty Car rental franchises, has an equipment leasing firm and is moving into real-estate development. And Reynolds also hopes to get into alternative energy projects and funding feature television and film productions.
If the Asadurians’ goal is to share some of their wealth with employees, they have plenty to spare. Real-estate records show that the Asadurians own 14 pieces of land in Ventura and Los Angeles counties with an assessed value of $2.2 million (the market value would be higher). The Asadurians also are listed as co-owners of several pieces of land in Moorpark, worth another $1 million or so.
Meanwhile, the Asadurians’ 67% of G.I. Industries stock--based on a recent over-the-counter price of $7.50 per share--is worth $14 million.
Profit Expected
But the value of all the Asadurian companies figures to be much higher. Van Rossen estimates that G.I. will turn a profit of at least 10 cents per dollar of sales, which is in line with the best-run solid-waste disposal companies in the United States, including the billion-dollar-plus firms of Waste Management and Browning-Ferris Industries.
The total market value of Browning-Ferris and Waste Management’s stock is better than twice their companies’ annual sales. Applying this formula, the Asadurians control companies--public and private--worth about $60 million.
Neither generation of Asadurians is shy about displaying their wealth. Sam, Manny, Carl and Manny Jr. each drive 1987 Rolls-Royces, and they have a fondness for glitzy jewelry.
There was the unfortunate Saturday night in 1986, for instance, when Manny Jr. met a young woman in a Reno casino and took her to his hotel room. When he woke up at 2 a.m., she was gone--and so was $200,000 worth of his jewelry, according to a police report.
The family business dates back to Sam and Manny’s father, an Armenian emigrant who had a small trash-collection route. By the mid-1950s, the brothers started buying out other trash-collection routes in the San Fernando Valley, paying as much as 15 times monthly revenues. “In them days, a truck could only pick up maybe $7,000” a month, Sam said.
In 1969, the Asadurians sold their business for $4 million in stock, cash and assumption of debt to SCA Services, a much larger rubbish company. “I thought I had enough money to retire with,” Sam said.
Sam, who wanted to be a jockey when he was a child, moved to Moorpark to raise thoroughbreds. But SCA’s stock declined. At the same time, Sam said, “our boys would not go to college. They wanted the rubbish business.”
So the brothers found a small rubbish-collection company in Ojai that was losing $1,800 a month and bought it “to test the kids,” Sam said. “Within three, four months, they had that straightened out.”
From the early 1970s, the fathers and sons aggressively bought up smaller rubbish companies. One of the Asadurians’ advantages is size. A new garbage truck can cost $140,000 and reliable service is a key to success. Smaller haulers must often make do with older equipment.
Chuck Anderson, whose family operates a rubbish-collection firm in Moorpark and Simi Valley, said that several years ago in Simi Valley, there “were three or four companies out here and the Asadurians came in and bought them all, except for us. They approached us, too. But our family business is not for sale.”
Significant Franchises
As a result, the Asadurians have landed significant trash-collection franchises in Simi Valley, where they handle 90% of the residential trash pickups, and Thousand Oaks, where the Asadurians and their relatives have three of the city’s seven rubbish franchises.
J. Louis Scherer, director of the Department of Public Works in Thousand Oaks, said the city switched to a franchise agreement in 1973. “At that time, we had garbage cans on the streets all the time, trucks driving through the streets seven days a week making pickups. It was really uneconomic for the haulers and a disaster for the city.”
The city parceled out exclusive franchises for particular territories, based on the amount of business the companies were already doing in the city. The city sets the rates and has the power to cancel the franchises for shoddy service. In return, the companies pay the city a fee of 3% of their sales.
“It’s worked out pretty well,” Scherer said. “We have the lowest rates in Ventura County.” Thousand Oaks also picked up $92,150 in franchise fees from the rubbish companies in the last fiscal year.
It’s also a sweet deal for the companies, amounting to a legalized monopoly. “No, no, no, no, no,” Sam Asadurian insisted. “It’s no monopoly. If you’re not giving the service, you’re out.”
‘Provided Good Service’
Indeed, Diane Davis-Crompton, director of community services for Simi Valley, gives the Asadurians high marks, commenting that “they have provided very good service.” And it seems a safe bet that the Asadurians’ franchise will be renewed by the City Council for another five years.
The franchise system, of course, makes it difficult for a new rubbish company to break in. “Why fix something that isn’t broken?” Davis-Crompton said.
Over the years, the Asadurians have been involved in various legal scrapes, which suggests that they didn’t get to the top without stepping on a few toes.
In 1975, Sam Asadurian was indicted by a Fresno grand jury for allegedly bribing a city councilman with $25,000 in order to win an exclusive franchise for one of the Asadurians’ rubbish companies. But the charges, which Asadurian called “ridiculous,” were later dropped on grounds of insufficient evidence.
Four years ago, one of the Asadurians’ companies sued Richard Siroonian in Los Angeles Superior Court, alleging that he violated a no-compete clause after they bought out his rubbish company. Siroonian had gone to work with his brother in another trash-collection company and, when it bid on local jobs, the Asadurians sued. Ultimately, the judge ruled in Siroonian’s favor, voiding the no-compete clause, and the Siroonians were back in business.
Sale Negotiated
In the course of the suit, however, Siroonian filed a colorful account of the final negotiations of the sale of his company. According to court papers, the two parties reached an agreement on a Friday, although nothing had been signed.
“On the following Monday,” Siroonian’s statement read, “I arrived at my place of business to find that all of the office furnishings, rubbish containers, trucks, cars, radios, tires, tools and other equipment had been taken. I contacted Manny Asadurian and demanded that he pay me immediately for the property he took or return it. He assured me he was going to pay for the property he took, but that his lawyer needed a few days to draw up the papers.”
Two weeks later, Siroonian signed a contract. But one of Siroonian’s attorneys later said in court papers that the Asadurians had gotten Siroonian’s business “through fraud, deceit and theft.”
Sam Asadurian recently explained that Siroonian’s partners had provided them with the company’s equipment, and it was all according to their agreement.
Another case involving an Asadurian rival is working its way through Superior Court in Ventura County. G.I. Rubbish sued Henry Sahagian, who runs Valley Commercial Disposal in Thousand Oaks. The Asadurians alleged unfair trade practices, charging that Sahagian tried to raid their customers by hauling rubbish below cost and that he violated a no-compete clause. In 1978, the Asadurians bought a rubbish firm from Sahagian and his family for $150,000 in cash and notes.
‘Unfairly Low Price’
It is a messy lawsuit. Among other things, Sahagian claims in court papers that it’s the Asadurians who were taking away his customers. Sahagian also alleges in court documents that Sam Asadurian physically attacked him and that the Asadurian lawsuits were “brought for the sole purpose of harassing me and my family, and with the intent to force me to sell Valley Commercial to . . . Sam Asadurian, at an unfairly low price.”
“I’ve never done that in my life,” Sam Asadurian said in an interview. “I’ve bought everybody out on a fair-and-square basis.”
The case is expected come to trial later this year.
All this time spent on legal matters can run up quite a tab, judging by yet another lawsuit involving the Asadurians. Their former law firm, MacDonald, Halsted & Laybourne in Los Angeles, has gone to court over $271,000 in allegedly unpaid legal fees that the Asadurians piled up in 19 months. Van Rossen said an out-of-court settlement is likely.
